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What to Do if You Are a Frozen Investor

The second step is realizing that the markets aren't logical, they are psychological. I have seen many very smart people try to apply logical macro-economic reasoning to investing and ultimately fail. Don't ever forget that an investment can always go higher or lower despite all evidence to the contrary.

The stock market can climb a wall of worry when the news is terrible or fall out of bed when everything seems great. Just because the SPDR S&P 500 ETF (SPY)SPY gained over 30% last year does not mean that it can't notch double-digit gains again in 2014.

The third step is research and education. If you are reading this article, then you are surely in the mindset that you want to enhance your investment success by increasing your knowledge base. Start out by reviewing some of the investment options that make the most sense and begin sifting through strategies that seem to resonate with your mindset.

For my clients, I am a big fan of using exchange-traded funds as a low-cost, diversified, liquid and transparent investment vehicle. There are now thousands of ETFs that give you the ability to invest in nearly any opportunity or theme you can imagine.

The fourth step is decision and implementation. Start out with small purchases of some select investments that you feel will outperform over time. You don't have to go from zero to 100% invested on day one. However, you can start to make incremental changes to your portfolio that will allow you to achieve positive investment results. You can then add to your holdings over time by averaging into existing positions or purchasing new investments.

My recommendation is to pair your portfolio with both stocks and bonds so that you take on a balanced approach and offset potential volatility. The Vanguard Total Stock Market ETF (VTI)VTI is an excellent core equity holding, while the Pimco Total Return ETF (BOND)BOND might be a worthy fixed-income opportunity.

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