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Build a plan based on your specific goals

To design a consistent, comprehensive investment plan, you need a strategy tailored to meet the goals you consider most important. By focusing on three key factors -- time horizon, return, and risk -- you can build the plan that's most effective for you.

First, in Chart 1, indicate your major goals, their projected costs, and when ou want to achieve them. Total these costs by time horizon.

Projecting costs takes careful thought, because each person's situation is unique. Be sure to consider all relevant factors, including inflation.

Your time horizon is critical, since short-term plans call for relatively liquid, stable investments. Longer-term plans often let you accept fluctuation value in pursuit of higher returns.

See how your investment choices line up

How well do your investments correspond to your goals and their time horizons?

Chart 2 can tell you. On the left, write the total projected costs of your coals amounts A, B, and C from Chart 1) next to their respective time horizon boxes.

Then read across to see the investment characteristics to look for, what the tradeoffs are, and the types of investments that are appropriate based on different time horizons.

To see if your current investments fall into these categories, enter the value of each of your current assets on the right. Remember to include bank accounts, IRAs, and pensions

(etc.)

Rethink your investments periodically

Most people should make a practice of reviewing their goals and investments once a year. You'll probably also want to review you plan breifly every time you make an investment.

As your circumstances change, you may also want to change your strategy. Reviewing and revising your answers to questions 1-5 can help you make appropriate alterations in your investing framework.

In the end, all the principles boil down to three simple rules:

• Set clear financial goals
• Choose investments that provide the combination of risk, reward, and time horizon appropriate for you.
• Minimize your risk by diversifying as broadly as you can.

We hope that you find this information useful as you plan your investments.

If you would like other information -- such as help with retirement planning, college planning, tax-free investing, or risk management -- please call anytime. Our experienced representatives are always available.
If you have questions, we want to help. Call 1-800-000-0000 toll-free.