A financial plan is simply a guide to help you determine where you are financially, where you want to be, and how to get there. Your personal financial plan should have definitive objectives and goals that are obtainable and quantifiable, but also your financial plan must be flexible enough to allow for adjustments for market changes and life's uncertainties. Many people resist creating a financial plan because it seems like too much trouble - until they find themselves in financial difficulty. If you've been seeing the value of your investments seesaw, now may be the time to consider the benefits of putting a solid financial plan together.

You can create the plan yourself or seek a qualified financial professional who has the knowledge and experience to help guide your key decisions. A good financial plan will address more than your investments - it will look at all the pieces of your financial picture, including investment objectives, diversification, market opportunities, risk tolerance, budgeting, cash flow, savings, liability, credit, taxes, insurance, retirement planning, estate strategies, asset protection and more.

Since it's the investment portion of your financial picture that we are most concerned with here, let's look at some of the related questions your financial professional will ask:

• What are your investment goals?
• Are you saving for a long-term goal, like retirement or a child's education?
• Are you hoping to fulfill a more immediate dream, like starting your own business or paying for a daughter's wedding?
• How much money do you have available to invest?
• How long will you keep the money invested?
• Can you add to your investments on a regular basis?
• Do you need the income from your investments for living expenses?
• Do you have enough cash readily available in the event of an emergency?
• How much can you afford to put at risk? In other words, what is your risk tolerance level?

Partly, this last one is a question about your psychology of investing. But it's also a question that concerns your age, your current income, your potential income, and your total assets.

The answers to these and other important questions are merely the starting points for the investment portion of your financial plan. The next step is to outline the types of investments that are appropriate for you (risk tolerance) and how much of each to invest in (asset allocation and diversification). Specifically, you need to decide how much to put in liquid investments, like money market funds*, how much in cash flow-generating investments, like bonds, and how much to put in long-term growth investment, like equities, and what specific kind of stocks.

Wise investors know that a diversified stock portfolio helps cushion against the ups and downs of the market. There are many different groupings of stocks-by industry, by market cap size (large, medium and small), by investment style (growth, value and blended), by country (U.S., international), and so forth.

Each of these various types of investments performs differently under different market conditions. Often some segments of the investment universe will be rising while others will be declining. A well-designed financial plan will help stabilize your investment returns through both good and bad markets, thus allowing you to make more predictable choices when it comes to your finances. Deciding on an appropriate asset mix for your particular situation can be the most important investment decision you make.

Whether you choose to create your own financial plan or seek out the help of a professional, having a plan in place can help ensure that your investment decisions are the right ones for you. Markets go up and markets go down, but good planning can help you take control of your finances. Call us today. We can help.

*An investment in the fund is neither insured nor guaranteed by the U.S. Government or any other government agency.  Although the Fund seeks to preserve the value of the investment at $1.00 per share, it is possible to lose money.