Answer:
One of the problems with investing in general and the stock market in particular is that no one really knows what could happen tomorrow. This uncertainty keeps a lot of people away from the markets and prevents them from harnessing the potential that a good investment can provide. There are still many things you can do to beat the odds and make sure that you have a good retirement account set up for yourself when the time comes.

Higher risk can mean higher rewards

One of the most basic ideas behind investing is that a very high profit or earning potential is usually accompanied by a higher risk factor than a less aggressive investment. The risk tolerance of an individual investor can fluctuate based on many different factors, but most say that younger investors can generally handle more risk than older investors. The logic behind this is that if you are young and an investment doesn't work out according to plan, you will have more time to recuperate from the loss before you need to use the money for living day to day. Many investing experts and portfolio managers recommend that you invest more aggressively when younger and then gradually decrease the amount of risk in your portfolio as retirement gets closer. Stocks generally tend to be higher risk than bonds or money market accounts.

Save as long as you can

Starting to invest earlier is a great idea for maximizing retirement potential. Compound interest is an investors' best friend and can dramatically increase the amount of money you can accumulate over a long period of time. Start investing now and stop putting it off until you `have more money' to invest. Even if your contributions to a retirement account are modest now, they will still earn interest over the years and continue to grow for a long time. A long term investing approach has proven to be very successful for many retirees and can work for you too.

Diversify your portfolio

You should never put all your eggs in one basket especially if that basket is what you will be living on for the last several decades of your life. One of the ways that good investors and corporations help mitigate risk is by diversification. Spread out your assets and your investments so that if you have a mishap with one of your investments that you will still be able to weather the storm and pull out of the difficult situation. There may be a primary account that you contribute to and where you have a good portion of your money saved up, but you should spread things out as much as possible. When you can, separate your accounts into different banks and understand the Federal protections and guarantees you have on your account and make sure all your money is protected. It's a good idea to have some stock in your portfolio along with some bonds, CD accounts, money market accounts, mutual fund and even some cash in the bank. Having several types of accounts can prevent a total meltdown to your finances if one of your assets goes sour. No matter what type of investing you are doing to prepare for retirement, make sure that you are always aware of the regulations and laws that govern your investments and be sure to honest with your dealings.