January

Create a Budget - Sorry to pull the band-aid off right away, but if you don’t have a monthly and annual budget in place, it’s time to get them. You’ll want a monthly budget to cover your main cash flow needs (food, clothing, housing, utilities, transportation, etc). The idea of an annual budget is to help you plan for taxes, holiday expenses, birthday gifts, car insurance, vacations and any other expenses that crop up throughout the year.

You’ll want to have a plan in place to save for the items that fall in your annual budget since these can easily be overlooked in your budget since they usually don’t occur every month. Depending on when these expenses fall, you may have to maintain a higher savings rate at the beginning of the year to save up for expenses such as your summer vacation.

To help you create and track your budget, consider using Mint (www.mint.com), Quicken,  an Excel/Numbers spreadsheet, a pen and ledger, or notes on your 2012 calendar.

If you already have a budget, make sure to do an annual review of your 2011 income and expenses to see how you ended up. Did too many unexpected expenses cause you to drain your emergency fund or slow down that extra retirement savings? If so, look to see where need to make adjustments for 2012’s budget.

Increase Your Retirement Contribution – If you have an employer sponsored retirement plan at work, consider increasing your annual contribution percentage by 1%. If your employer offers a match (many companies that halted employee matches during the recession have been phasing them back in), try to contribute enough to receive the maximum match. The 2012 maximum elective deferral you can make to 401(k), 403(b), 457 & Roth 401(k) plans was increased to $17,000. If you’re over 50, you can also make a catch-up contribution up to an additional $5,500 for the year.

Don’t have a 401(k) or 403(b) plan? Look into opening either an IRA or a Roth IRA. You have plenty of flexibility on where you can open the account and it may not take as much money as you’re thinking to get started. The maximum contribution you can put in an IRA is currently $5,000 annualy, with an additional $1,000 available if you’re over 50.

You should speak with your accountant about which account(s) you will qualify for and any tax benefits that may be available to you. Your accountant can also help you decide on an appropriate retirement plan if you’re self employed. Your financial planner can also provide you with a general overview of the qualifications for several of these accounts.

February

Review Your Budget – You diligently worked on figuring out your monthly and annual expenses, now you need to see how you ended spending your money in January. See if you were on target or if your budget was completely overwhelmed by unexpected expenses (car repairs, vet bills, trip to the hospital). Make any adjustments you need to help you stay on track. Now that you’ve started the momentum, keep reviewing that budget each month. Remember that the goal is not to increase your budget each month, but to adjust your spending to reflect your budget.

If you didn’t track all those purchases, now’s your time for a second chance, and you can get started on creating your budget in the shortest month of the year.

Emergency Fund – A general rule of thumb is to have between three to six month’s worth of living expenses saved in an emergency fund. A good way to start is to work on saving enough to cover your auto deductible, then add on top your homeowner’s deductible and then work on having your health insurance deductible added to the mix. This will be a good way to have concrete objectives in building up your emergency fund. Your financial planner can help you design a specific emergency fund plan that meets your family’s needs.

March

Taxes - Work on your tax return(s) now. If you don’t have all of your tax documents, you can at least start working with what you do have. If you use an accountant, you can be gathering up any documents and receipts that you’ll need to provide. If you documents can be organized, your accountant will greatly appreciate your organized files. By working on  your taxes now, this will at least give you a ball park of where you may end up when it’s time to file and can give you an indicator if you may be sending a check to the US Treasury. If you haven’t taken advantage of your IRA options, you still have through April 17th (The tax filing deadline has been extended from the 15th this year) to get those contributions made and be able to deduct them on your 2011 return.

Spring Cleaning - As you go through the process of cleaning out your house, instead of tossing items that still have a useful life consider donating them to charity or consigning them. Ready to clean out the last few years of accumulated clothes? Same thing, consider consigning or donating them to a local charity.

Now it’s time to move on to all those paper documents:

Bank and Credit Card Statements – You generally won’t need more than a year’s worth of bank or credit card statements. You will want to keep any statements that show proof of purchases that you used when filing a tax return to claim an expenses or deduction with your tax returns.

Insurance Policies – As you receive updated policies you will no longer need to keep your older policies. If you have a claim in process, hang on to your old policy until your claim is settled.

Investment Records – Keep a copy of your annual statement until all investments on those statements have been sold. You may not need to keep your monthly or quarterly statements if the important information from those statements has been included on your annual statement (purchases, sells, deposits, withdrawals, dividends and capital gains paid)

Pay Stubs – make sure your pay stubs match up to what was reported on your W-2. If they match up, then you can shred your old pay stubs. If they don’t match up, ask for your employer or former employer to send you a corrected W-2, known as W-2C.

Major Purchases – If you’ve purchased jewelry, computer(s), artwork or other major items this year, keep the receipt or a copy of the receipt in a fire proof safe. In the event that you have to file an insurance claim, you will have proof of your purchase and the price you paid for the item (this applies to having to file a claim on your homeowner’s or renter’s insurance).

These steps will help you start 2012 on a good financial footing and will help you prepare for some of the other action items that will come up during the year.

If you’re looking for a more in-depth money transformation in 2012, I encourage you to call me at 919.695.3007 or email me (chris@vbwealth.com) so we can discuss the benefits and services I offer to help you move toward your personal and financial goals.

Wishing you a prosperous 2012.

Chris

Grieving is a process – this is crucial to understand. Everybody has a different process in how they grieve and how long the process takes, so don’t assume that if you have a short grieving process, everybody does.

Sit with them – this can be one of the most important levels of support you can provide. The pressure of having to share any feelings or words can be taken away, and they just have a person who can simply provide a supporting presence.

Let them feel sad – during a period of grieving, your sympathy and support will be more important than trying to cheer them up; sadness is a normal emotion to feel. Look for cues that they may be experiencing more than sadness and may be suffering from depression.

Be a good listener – let the person have an outlet to speak and share their feelings. Let them do the majority of the talking, and try not to give advice.

Ask about their feelings – this can be difficult, but it allows them an opportunity to express themselves. They may surprise you with some of the feelings they have.

Share your feelings – even if you’ve never gone through this experience, they may take comfort in knowing that they have your sympathy and that you have an emotional interest in them and their well-being.

Be available when you can – this just reassures them of your support, and they can know they have people to turn to.

Talk about your own losses – you may not have experienced the same type of loss, but you can share memories of your own experiences to help provide comfort.

Remember the loss – at times it may be uncomfortable to bring up the loss, but it gives you an opportunity to acknowledge the person, the loss they experienced and see that they’re moving through the grieving process.

These are just a few of the ways you can help support somebody that is experiencing grief. Here are two links to provide additional resources on the grieving process:

When working with families that have experienced a recent loss, I may play an active in role in helping the family deal with settling the financial affairs. Since I’m active in this process, I’m able to provide support to the family and see if lingering feelings of grief may be present. I also need to respect the feelings and situations these families are in so that I can make appropriate recommendations to the family on how to proceed with the financial goals or if the financial goals need to be reevaluated. It is important for me to anticipate that after a person has experienced a loss, they may need additional reassurance about their investments, investment strategies and goals. It is not unusual to see an attachment to certain investments; that will require me to address recommendations about these investments in a different manner.

A financial planner isn’t necessarily the person you would identify as being a support person to a family or person in grief, but because of the unique relationships I create with my clients, I am generally more involved in the grieving process than many people would expect. While I am not the one drafting the wills or other legal documents, I work with the family and their attorney to help make the process of settling the estate as easy a transition as it can be. I can help the family start to refocus on their goals and help them find motivation in moving forward. If through these conversations, I feel that they may need to seek additional assistance, I can voice my concerns to them in a professional manner.

If you’re experiencing grief, look for support groups in your area that can help provide additional support and resources to you.

Most of us see a college education as a crucial tool in helping us fulfill our own vision of the American Dream. We also see a college education as a way to help our children achieve their own dreams. The importance placed on having a college education has also left us with learning how to handle the uncertainty of tuition increases over the past thirty years. We’ve seen dramatic changes in the cost of attending college over this thirty-year period. From my own experience, in the seven years since I graduated from Texas Tech University tuition has increased by 50%. In the three and a half years that I was at Texas Tech, tuition increased by 68%. These are rapid changes to the cost of college, and we have limited options in how we can absorb these rapid cost increases. As a financial planner, it’s important for me to understand these changes and use the relevant data to help me assist my clients with their goals.

I’ve spent that last few days researching and analyzing historical tuition data for North Carolina State University (NC State), Texas Tech University and Duke University. I’ll warn you that the results of these data may seem overwhelming, but it’s important to understand what the historical changes in tuition costs have been as we go through the college planning process.

This first set of data relates to the total percentage change in college tuition during three different time periods. The first time period is the 1981-’82 academic year through academic year 2011-’12. This data point was examined so that I could have a 30 year history of tuition changes and gain a long term perspective on tuition increases. The next period is the academic years 1994-’95 through 2011-’12; this time period represents the increase in tuition costs for an 18 year old who is part of the incoming freshman class of 2011. The final academic time period is 2008-’09 through 2011-’12, and this represents the change in tuition that has occurred for the graduating seniors in May 2012 (assuming a four year undergraduate curriculum). Chart 1 reflects the total percentage change for the three universities during these time periods. Graph 1 highlights the changing values of tuition at Texas Tech and NC State, while Graph 2 shows the changing tuition values at Duke and Stanford.

Chart 1: Percentage change in tuition

Graph 1: Change in Tuition at NC State and Texas Tech University since 1980-’81 to 2011-’12

Graph 2: Change in Tuition at Duke University and Stanford University since 1980-’81 to 2011-’12

After I calculated these rather striking numbers, I then calculated the percentage change from year-to-year using the 1981-’82 academic year as my starting point. Once I calculated the percentage change in tuition from year-to-year, I took a simple arithmetic average to calculate the average annual percentage change for these three periods of time. This helped to bring these numbers into perspective. If we know the average annual increase in tuition, we will have a better idea of what the targeted annual return for education accounts will need to be. Chart 2 details the average annual percentage change for the three universities.

Chart 2: Average annual percentage change in tuition

The striking thing to me about these results is that the 30 year average annual return is relatively close to the two other time horizons. Since we have the average annual rate of  increase in tuition, we can see for a public university the education account would need to average an annual return between 9% and 10% to keep up with an average level of tuition hikes. I would consider this to be a very aggressive target to maintain, especially since we’ve seen a high level of market volatility impacting investment returns since 2008. Depending on your own experiences and risk tolerance, you may not feel comfortable with this much risk in the education savings for your children. If you want to be more conservative in how this money is invested, you’ll need to plan for a higher monthly savings goal.

How much will you need to save to fund four years at a public university? This is going to depend on how old your children are and if there is any current savings you or family members have set aside for college. For a newborn, lets assume a 9% annual increase in tuition for the next 22 years (18 years until college, 4 years in college) the estimated total cost of tuition and fees for four years at NC State would be $151,400 and the estimated four year total for tuition and fees at Texas Tech would be $189,100. This is a steep investment in your child’s education, and I’m currently only using tuition and fees in this example. Additional savings would be needed to cover text books, housing, food, clothes and all the other expenses that fall into a college lifestyle.

Now that you have the total estimated cost for tuition and fees, let’s break it down into the monthly amount of savings needed to save the total tuition cost by the time your child turns 18.  I’ve provided three different scenarios to show the impact savings and investing would have on the saving’s goal. The first scenario is if you didn’t earn any return on your savings. The second is if you saved in an account that generated an average annual return of 1% and the final scenario is if you invested the monthly savings in an account that averaged an annual return of 5%. This also assumes that you start saving the month your child is born. Chart 3 shows the necessary monthly savings needed to reach this goal based on the three variable different return scenarios.

Chart 3: The monthly savings required based on three different assumed average annual returns.

As you can see, the impact of the return on your investments will certainly factor into the amount needed to save to cover four years of college. Another factor will be as your children get closer to college age, the account would probably be invested more conservatively to help limit the impact of a major market downturn before your child gets ready to attend college.

Hopefully, you’re still with me and not feeling financially doomed. I would like to think that we’ll reach a level where tuition will flatten out and we will no longer see these continual tuition hikes. I feel that as a member of the financial planning industry, I need to be doing more to research the underlying issue of why tuition keeps increasing and helping to find solutions and alternatives to alleviate this trend of ever-rising tuition. I certainly don’t want to see that the ability families to send their children to college is out of reach and I’ll be doing my best to provide insightful and meaningful research and solutions to this conversation.

I’m hoping that in the coming months as I do further research, I’ll be able to provide you additional information on what is contributing to the ever-increasing cost of college. I can tell you currently, we see part of the tuition hikes needed as state legislatures reduce funding for higher education. We’ve also seen the expansion of campus construction for new academic buildings, athletic complexes and parking garages factor into the increasing costs of running a university, and this is more than likely contributing to tuition increases as well.

If you find yourself needing some guidance on developing your education goals and savings strategy, pick up the phone and call me at 919.695.3007 so we can have a frank discussion of where you are today financially and how I may be able to help you and your family reach your education goals.

To the first point, the “it depends” response is based on the fact that the financial needs and resources of each person, family and business are different. Financial planning isn’t designed to be a series of fill-in-the-blank questions that provide you with a generic answer. Financial planning is designed to be a dynamic and engaging process where the client and advisor are able to have an ongoing dialogue to discuss each client’s unique circumstances, feelings, cash flow and goals in order to create personalized recommendations that make sense for the client. The plan may even need to be adjusted as circumstances in your life change, and the dialogue is important to help your plan be adjusted as necessary. You certainly wouldn’t want your physician to prescribe you medication or treatment based on a limited conversation, so why would you want to seek financial advice based on a limited conversation and limited set of information?

A simple answer never gives you the fair thought, consideration and response your question needs and you deserve. In other words, by just generically answering your question, I’m probably not providing any meaningful advice or information to you.

For the initial question that was asked, “Would one ever need multiple life insurance policies?”, the answer is certainly and many people carry multiple life insurance policies. The reasons that drive this need for multiple life insurance policies is related to the circumstances of each individual’s life, financial situation and personal desires. One of the issues that factor into the search for additional life insurance stems from the level of insurance you currently have and if it will provide the level of support you desire.

You may currently only have life insurance that is offered through your employer, and it isn’t enough to provide the level of support you would like. For example, you already have an existing life insurance policy, but it won’t provide the level of coverage you’d like now that you’ve started a family. Or, you have a term life insurance policy that you realize may need to be continued, and you’re not sure if you could qualify for competitive rates when you’re in your 50’s or 60’s. These are just a few of the questions that go into the process of reviewing life insurance needs, and there are certainly many other questions and issues you’ll need to consider when thinking about life insurance coverage. I haven’t even touched on which type of insurance policy you may want and the variations between them. As you can see, this simple question has turned into something much more in depth than a simple yes or no answer.

Vaughan-Brown Wealth Management, LLC is set up as a fee-only financial planning firm. This means that we do not receive any type of commission based on our recommendations or for the implementation of the recommendations and suggestions we provide you. Part of our financial planning process is to work with you through a life insurance needs analysis and help you determine the pros and cons of the coverage you have in place. We discuss the current level of coverage and if it may make sense to pursue additional coverage, replace coverage and even if you want to consider canceling some coverage. Since we don’t receive a commission on the recommendations we provide you, you’re able to have a higher level of comfort knowing that your best interest is driving this discussion and not a sales agenda.

Interested in learning more about the financial planning process? Contact my office and set up an introductory meeting. You can reach me at 919.695.3007 or by email at chris@vbwealth.com

I am an optimist, and I always try and see the best in every situation. During the past three years, the economic climate has certainly made it a bit harder to keep my optimistic outlook, but I continue to believe that we’ll see the economy recover, unemployment drop and a sense of relief shared across the global economy. How long will this take? I don’t know. I’d prefer it to happen much sooner, rather than later, as we all do. In the meantime, I look for signs of encouragement and inspiration outside of the daily stock market returns, and this volunteer opportunity provided this experience.

The week before Duke students begin their fall classes, they have the opportunity to come to campus early and create new bonds with fellow students and within the Durham community. We had eight student volunteers, five freshmen and three upper classmen. These eight students came from a variety of backgrounds and regions of the country. For this week, they were working together because they all shared a common bond of wanting to be involved in their new community through volunteer work.

I was impressed by their willingness to work together and amazed by the skills they were all able to share with each other as the morning and afternoon progressed. As the mulching went on, I learned that in the evenings the group would gather and share stories of where they grew up and the challenges and dreams they had already encountered and accomplished. They all came from different places as strangers and will leave this weeklong experience as friends. After moving into their freshman dorms they’ll know that at least seven friendly faces on campus.

The sense of optimism I had came from seeing how these students, who carried themselves in a professional and courteous manner, would be the next generation of government leaders and CEOs. I can see that when these young achievers put their minds to the task, they will certainly be innovative and have tremendous accomplishments in the years ahead. By working together with people they never would have had met otherwise, they are building the crucial skills needed to help resolve conflict and developing a respect for the opinions of others.

I know that other colleges and universities have similar programs in place. As you see your children or grandchildren head off to college, encourage them to find out if an opportunity like this exists and encourage them to be involved. The freshmen students were able to learn their way around the campus, the new city they’d be spending at least the next four years of their lives in and more importantly they were able to make some of their first campus friends. The benefit to the other classmen is they were able to share their experiences with the newest class of freshmen and provided an opportunity to build their own leadership skills.

If your child’s university doesn’t have a program in place, encourage your children to lobby the campus administration and student government to create a program. For those of us who have been out of college a few years, find a way to volunteer with these students so you can see firsthand the potential that the latest generation of young leaders have. Hopefully, you’ll catch the optimism, like I did, that these young minds provide us.

Rather than focus on the latest wrench in the global economic recovery, I want you to go through a process with me. I want you to take a few minutes today to create your Wealth Statement. I’ve adapted my own Wealth Statement to help me focus not on building wealth, but on how I wish to live my life. My Wealth Statement helps me keep the world in perspective and filter out the noise that can otherwise be distracting.

We all see wealth in different ways and it’s important to remember this as you create your Wealth Statement. Some may see wealth as being able to retire at 50, some may see it as owning a Porsche and others may see it as time spent with friends and loved ones. While Merriam-Webster defines wealth as “abundance of valuable material possessions or resources”, I see wealth beyond that.  I see wealth as the people, and events that bring happiness and fulfillment to our lives, with material possessions and resources as a tool to help us further enhance this experience, but not necessarily the key to being wealthy.

My Wealth Statement is “To live each day to assist those in need through volunteering and charitable giving. To always work relentlessly and in the best interest of the families and businesses that have shared their aspirations with me. To be the best husband, father and son that I can be – and understand that I can’t be perfect at all three, all the time.”

My Wealth Statement isn’t tied to reaching any designated financial goal, but to help me pursue my passion of helping others, whether it be through serving meals to the needy, shoveling mulch at church or helping businesses and families map their way to success. My fulfillment in life isn’t tied the daily performance of the stock market, but to the actions that I can control and take each day. This Wealth Statement helps me see past the short-term ups and downs of the market and keep my focus on the things that are important in my daily life and to my long-term goals. It challenges me to rethink and review recommendations and look for possible deviations that will need to be addressed. It keeps me grounded so that I can have more meaningful relationships with the people that are seeking my advice and recommendations.

What I want you to do now is to think about what is important to you today. Will this same thing be important to you in ten years or twenty years? If it is, start to think how this adds wealth and fulfillment to your life. How does your job, savings and spending tie into these important goals and desires? If the items that are important to you today won’t be important to you in ten or twenty years, what is going to change that no longer makes them important to you? Do you need to focus on them as much today or find other ways to focus your time and energy?

Going through this process will help you realize the things that are truly important to you not just today, but for your long-term fulfillment as well. Write down and commit your Wealth Statement to memory. When you’re frustrated at work, disgusted by politics or feeling panicked about the stock market, come back to your Wealth Statement and look for it to give you the resolve and guidance to stay the course. You’ll know that fulfillment in your life is able to come through other means and that a few bad weeks of portfolio returns, will likely be insignificant in ten or twenty years.

To keep Friday’s announcement in perspective, let’s review that Standard & Poor’s uses 12 main ratings categories. The AAA rating is the best and a D rating is the lowest. They can supplement some of these ratings with a + or – to indicate relative standing within the category, for instance you can have AA+, AA or AA-.

The AA+ rating that the US was downgraded to is the second highest rating they award. In the opinion of Standard & Poor’s, we went from having an extremely strong capacity to meet our obligations to a very strong capacity. While we were downgraded, we weren’t downgraded by much, and so far we’ve only been downgraded by one rating agency. The research update that Standard & Poor’s issued on August 5, 2011 indicated that US Debt would remain on a negative outlook and US Debt could possibly be downgraded to AA within the next two years.

I’ve quoted the first two paragraphs of the Rationale that was issued by Standard & Poor’s on Friday because these two paragraphs do a very good job of explaining the beginning of the politics that led to this ratings downgrade.

“We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S.federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.”

My interpretation of this statement is that Standard & Poor’s is stating that they feel Congress and the President will be unable to work together to make the additional spending cuts that are necessary or look at potential methods to increase revenue (taxes) and that this has a bigger bearing than other economic issues surrounding the US at this time. Compared to other leading global economies, the US has not implemented the austerity measures that were put in place by England and other debt-stricken countries in Europe.

In the Presidential address on July 25, 2011, President Obama called for a balanced approach to work toward addressing our fiscal situation. This balanced approached was to be spending cuts coordinated with increased tax revenue by eliminating or revising certain tax deductions. The debt bill signed into law on August 2, 2011 included an initial provision to cut spending and a Congressional committee to find other cuts to be recommended later this year, but did not address any type of revenues.

Standard & Poor’s is reacting to the bill that was signed into law and the process that leads to it and believes that Congress will not be able to honor the commitment laid out within the bill. They also feel that Congress will be unable to have a meaningful and productive debate on proposals that would either reduce spending appropriately or deal with revisions to the tax code that would lead to an increase in tax revenues.

How does all of this relate to you? At this point we’re not certain. Since only one rating agency has currently downgraded long-term US Sovereign Debt it may not have the impact that was feared if a debt agreement had not been reached by August 2. If multiple ratings agencies had downgraded US Debt, we would have a clearer path in expecting what could happen. There will probably be some additional short-term volatility in the stock market. We may see some small to modest increase in interest rates. We may even see some back and forth between the ratings agencies on why one is downgrading US Debt, while one has affirmed the AAA rating.

The Federal Reserve Board will be meeting on Tuesday, and the minutes from that meeting will be closely watched to see what action the Federal Reserve may be taking to address the slowing economic data we’ve seen over the past few weeks and has helped fuel the recent sell off.

It will be important to resist the urge to make sudden changes to your investment strategy based on these recent events. We have investment policy statements in place to provide the direction and discipline to keep our investments focused on their long-term objectives. Over the coming months, we’ll hopefully see that Congress has realized they need to set aside their political ideology and come together to find common sense solutions to stimulate the economy and address the Federal Deficit. One step you can take is to make sure your voice is heard. Either call or send letters to your elected officials to express where you stand during this inflection point.

Remember that when all else fails and you’re feeling skittish about the market, pick up the phone and call your advisor. I’m here to help you reach the financial success you’re working and saving toward. I’m here to discuss the anxiety you fear and help you work through the cycle of market emotions. I’ll be glad to talk with you until you feel comfortable about the strategies and methods that are in place to help you reach your goals.

I’m not a market timer and I don’t ever attempt to predict where I think the market will be in two days much less two months from now. I believe that long-term investment strategies are in place to help provide the resolve and guidance during periods of economic uncertainty and economic prosperity.

Yesterday’s market decline is as emotionally devastating for you as it is for every investor and every advisor that works with individuals, families and businesses. When I see steep stock market declines, I know that it could potentially have an impact on some of the short and mid-range goals of my clients. It will also be important to review long-term time horizons over the coming months to reassess where we are in achieving our long-term goals if we don’t see an improvement in the market.

Over the coming weeks, I’ll be reviewing all of my clients’ short and mid-term goals, cash reserves and portfolio values. I’ll answer calls and emails to help calm fears and be ready to have frank discussions with some clients that may need to refocus some of their goals and savings efforts.

The purpose of investment diversification and allocating funds for various time horizons is to help alleviate some levels of market fluctuation from impacting all of our goals and all of our resources to meet these goals. Regardless of how well diversified we may be, we can still see steep declines in our investment portfolios that may require us to rethink or even reformulate our savings strategy.

In these times of market and economic uncertainty it is crucial to reassess your priorities and determine what steps you’re willing to take to fulfill your goals. It is easy to get caught up in headlines, fear, uncertainty and panic, but ultimately we need to refocus on our goals. By focusing on our goals, we’ll see that some of our desires are still possible to achieve and no adjustment is needed. We may see that a minor adjustment will keep us on track or only set us back by a few weeks rather than years. We’ll remember that after weathering the recession of 2008, we can still find ways to enrich our lives, meet our goals and fulfill our desires.

If you realize today that panic has overwhelmed you, step back and start to review your goals. Focus not only on your financial goals, but on your personal and career goals as well. Look for time to focus and reenergize with your family. Step above the noise of the market and put yourself back in control of your destiny and if needed pick up the phone and call your advisor.