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Creating an investment portfolio can be a daunting task, especially if you're counting on it to provide essential income later in life. Making the right initial decisions can mean better results and less worry later.

A common initial investment is through an employer-sponsored 401k plan, which has tax advantages and may include a contribution match from your employer. But regardless of how your investing journey begins, the following guidelines can help you start on the right foot and avoid some of the most common investor oversights.

1. Check up on your financial adviser's background

It's not uncommon to ask for help before investing for the first time. That guidance could come from a close friend or family member, but if you choose to work with a financial professional, make sure you check out his or her background before moving forward.

Lori Schock, director of the Security Exchange Commission's office of investor education and advocacy, says you should ask to see the advisor's licensure documents and then independently verify the information. "Whether they had problems with regulators in the past, or whether they've had their own financial issues in the past, it's all publicly available," she says.

Avoid potentially biased or vague company websites and utilize government sources instead, such as the investment professional background check tool at "If you end up going off information from another area, you could end of working with a con artist," Schock says. "That's the worst-case scenario of what could happen. You hook up with a fraudster and essentially put your life savings at risk."

All legitimate investing professionals are required to be licensed with either the Security and Exchange Commission or your state's securities regulator, so if you can't find the professional in either of those areas, acknowledge that red flag and hold onto your wallet.

Also, be sure to ask about the fees financial advisors charge. If the costs are too high, examine your employer's retirement plan because it may provide access to a financial advisor at a lower cost.

2. Diversify your portfolio

Diversification within an investment portfolio is crucial for both security and profitability. By filling your portfolio with varied securities that have low correlations, which are numerical measures of how two investments move together, you can achieve a more efficient risk and return trade-off.

But don't get carried away. "If a 401k gives people 10 investment choices, a large percentage of people would simply put 10 percent into each choice and not have any rhyme or reason for the mix," says Casey Mervine, a Charles Schwab financial consultant.

On the other hand, also be wary of allocating your assets to a small number of investments. "Look at the folks who were employees at Enron who not only had their outside investments and stock but also their 401ks invested in Enron stock, and so then they lost their job, their outside money and their retirement plan," Schock says. Diversify your portfolio by allocating investments among different assets classes, such as stocks, bonds and cash.

"Another good rule of thumb is to watch how much you own of one particular asset or especially one area of stock," Schock says. "Diversify your products with different maturity dates and investing horizons based on how long that money needs to grow." Investing in a handful of mutual funds that represent different company sizes, domestic and international stocks, and different types of bonds can also help offset losses if one area of the market begins to struggle more than another. To maintain a diverse portfolio, conduct routine checkups and rebalance as necessary.

3. Read the fine print

If you understand the fees associated with investing, you can better understand how to maximize profitability. "Too often we see people not considering how costs, fees or even taxes will impact their returns down the road," Mervine says.

For example, mutual fund annual fees are expressed as expense ratios, which represent what it costs a company to operate the fund. They vary by the type of fund, but on average, the expense ratio for an actively managed stock mutual fund is approximately 1.43 percent per year, according to the Investment Company Institute.

It's important for new investors to understand how fees can affect your their returns over time. "For example, if you invested $10,000 in a product with a 10 percent annual return before expenses and annual operating expenses of 1.5 percent, after 20 years you would have about $49,725," according to the U.S. Security and Exchange Commission's website. "But if the investment had expenses of 0.5 percent, you would end up with $60,858 -- an 18 percent difference."

When it comes to fees, it pays to do extra research and ask questions. If you are working with an advisor, some of your inquiries could include: "What are the total fees required to purchase, maintain and sell this investment?" "What are the ongoing fees to manage my account?" Or for a mutual fund, "How much will I be charged to buy or sell shares?" You can also check the expense ratio of a mutual fund by searching its prospectus.

4. Make your portfolio your own

Some investors tend to seek immediate gratification and follow trends. However, according to Guy Weinhold, a financial advisor for Edward Jones, the best approach for you and your portfolio will match your individual goals and build slowly over time.

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Avoiding a "one size fits all" investing approach is important because "no two people have the exact same financial situation," he says.

Taking advice from fellow investors can be helpful, but proceed with caution. "A lot of people tend to directly follow advice from friends and it often doesn't work out so well," Mervine says. "You may be given an investment or given a tip, but until you take the time to understand why you are in an investment and learn what the investment is likely to do for you, you won't learn as much if someone told you something and you just blindly acted."

5. Don't let emotions get the best of you or your money

"The number one problem I think all investors face at some point is of an emotional component," Weinhold says. "When you let your emotions brew and make bad decisions based on the news or crisis of the day instead of focusing on your goals, that's when you can find yourself in trouble."

Combat this instinct by focusing on long-term plans. Creating a personal checklist or working with an advisor can help you avoid making knee-jerk decisions based on fear or greed. "New investors often want to see growth right away and fail to invest for the long run," Mervine says. "Investors will be better off to wait it out, be patient and educate themselves on all the ways that they can diversify."

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