-- Consider Taxes. Where you hold certain types of investments -- whether in a taxable or tax-advantaged account -- can have an impact on the capital gains taxes you pay. In the long term taxes can represent a significant drag on your overall investment returns.

To lessen this tax bite, first make full use of tax-advantaged accounts such as a 401(k) or an IRA. Then, as you choose investments:

-- Place relatively tax-efficient investments in taxable accounts (e.g., stocks you plan to hold more than a year or municipal bonds).

-- Place relatively tax-inefficient investments in tax-advantaged accounts (e.g., stocks you plan to hold less than a year).

-- Monitor and Rebalance Your Portfolio To Stay on Track. Creating an investment plan is a great start. But now you have to stay on top of it to make sure it's still working for you. Resolve to check your portfolio at least once a year -- quarterly is even better. You won't always like what you see, but with knowledge and planning, you may be able to make it better.

Here's what to look for:

-- Relative Performance -- Evaluate your portfolio's performance using the right benchmarks. For example, if you've invested in U.S. large-cap stocks, measure the performance of your stocks against the S&P 500(r) Index. For small-cap U.S. stocks, you can use the Russell 2000(r) Index. International stocks can be measured against the MSCI EAFE(r) Index. Even if you feel your stocks haven't performed as well as you hoped, if they are matching or outperforming their index, they're probably still a good choice.

-- Investment concentration. Make sure you don't have too much invested in a particular sector, industry or company. For instance, no more than 10 percent of your stock investments in any one company (and preferably much less) is a good guideline.

-- Individual investments -- Check to see if the ratings on your stocks have gone down.

-- Put Your Portfolio In Perspective. Once you've reviewed your portfolio and refined your investment plan, put the performance of your investments in perspective. We all want better investment results, but investing is a means to an end, not an end in itself. Stay focused on your goals. Be disciplined and follow your plan no matter what the market is doing. And remember that long-term progress is ultimately more important than short-term performance.