The hardest part of financial planning is planning for the things that you have no control over. Things like the downturn in the economy, housing prices falling and natural disasters (think Hurricane Katrina and the BP Oil spill). Although you can’t account for 100% of the bad things that happen, you can prepare yourself to deal with some of the unexpected.

I recently received a newsletter from Edward Jones and one of the articles listed four things that the average investor should be concerned about and how to deal with them in today’s economy. For full disclosure, I use Edward Jones to manage my Roth IRAs, my college savings through 529s and my wife’s 403B rollover.

Economic Unknowns

• Tax Increases - limit your taxes by fulling funding pre-tax retirement accounts
• Rising Interest Rates - when interest rates go up, the value of long-term bonds can fall. That doesn’t mean you should sell them, but you will want to monitor your bond investments to ensure your portfolio remains in balance
• Inflation - stocks have traditionally offered better protection than bonds, when inflation begins to rise. Short-term stock investing is risky, but over the long run, they generally outperform bonds
• Weak U.S. Dollar – seems like every country is struggling with their own budgets, so don’t overact every time you hear the dollar has fallen. It is a good idea to include international stocks/funds as part of your overall portfolio

Common Sense Actions

From an everyday personal finance perspective, our advice remains the same. Spend less than you make, establish an emergency fund and pay off your debt. When things get tough, if you have little to no debt, you can survive a lot easier than if your monthly income has to support your and your creditors.

Earlier this week, I posted an article on the necessity of saying “no” to certain things that are detrimental to your goals. Joe, over at Personal Finance by the Book, has a similar article discussing how saying “no” will impact your life and your finances.

With the up and down ride the stock market has been experiencing a lot of people jump off the ride at the wrong time. More importantly, a lot of people get on the ride at the wrong time. Sound Mind Investing has an interesting post on short term vs. long term approach of investing.

If you are investing for retirement then you need to understand the market goes up and down all the time. However, over the long-term, the market has trended up. The thing to remember is not to make investment decisions based on emotion.

Riding a roller coaster can invoke some really strong emotions…but if you remain calm, it will always (or almost always) smooth out and the end result is good. When the market gets a little crazy, just stay calm and say “no” to the emotional pull to get out of the market. Investing is a long-term proposition that will pay benefits over time. That doesn’t mean you should stick with a stock or fund until it completely crashes. When things start getting a little ‘too exciting’ for you, check with your broker and get some advice; that is what you are paying him/her for.

One of the most talked about topics in the Bible is money and possessions. Depending on what information you read, there are almost 1000 scriptures in the Bible that deal with this topic. Even if you are not a Christian or read the Bible, a lot of the financial information found in the Bible makes very good practical sense.

Sound Mind Investing is one of the leading voices when discussing Biblical Financial principles. In addition to their monthly newsletter, they also offer The Sound Mind Investing Handbook. Here is a list of just a few of the things you will find in this edition.

• Six characteristics of investing that glorifies God
• What mutual funds are and why they make investing easier than ever before
• How to implement an investing strategy that’s guaranteed to help you keep pace with the markets
• Tax-wise ways to invest for college, including the new state-sponsored 529 savings plans
• The rules governing IRAs and 401(k)s and which should have the priority
• How to make the calculations needed to make sure your retirement countdown is on schedule

The latest edition of the handbook is now ready and you can get your copy and enjoy a 35% discount. Sound Mind Investing has been endorsed by respected Christian teachers Ron Blue, Randy Alcorn, Mary Hunt, Howard Hendricks, and Beverly LaHaye. Previous editions endorsed by Larry Burkett, Bill Bright, Adrian Rogers, and D. James Kennedy. Get your copy of this great resource today.

The words “Dave Ramsey” usually invokes some pretty strong emotions when discussing financial principles. Let me say up front that I am a certified Dave Ramsey counselor, and I am debt free (except for our mortgage). We follow Dave’s Baby Steps and are very comfortable with what he teaches. Not every word is gospel, but for the most part his “grandma and God’s” common sense approach is dead on.

Why would I start out this post by affirming the Dave Ramsey way to personal finance? Because this post is base on a newsletter that I receive from him. In the latest “Investing Minute” newsletter, Dave lists 4 things you can do to avoid investment fraud.

1. Ask questions. An honest financial advisor with the heart of a teacher will be upfront with you. A scammer will dodge your questions or offer vague and unsatisfactory answers. It’s your money, so don’t be afraid to be inquisitive.
2. Stay involved. Keep an eye on your investments. Now, this doesn’t mean checking them every day. But open your mail and follow up with your investment professional. The more disengaged you are from your money, the more likely you are to fall victim to fraud.
3. Hire an advisor you can trust. You want an investment professional with the heart of a teacher. If he isn’t willing to answer your questions—or explain things in simple terms—then fire him and move on to someone else. It’s hard to trust someone who doesn’t have time for you.
4. Make sure the money you invest is paid to the mutual fund company, not your advisor. There is never a reason you should make a check payable to your advisor. Bernie Madoff wore both hats in his clients’ transactions, as advisor and owner of the mutual fund company. That is a big reason why he was able to get away with so much. You should be able to access your account and statements directly and not have to rely on your advisor to get them. Also, you should be able to withdraw any investment and receive it in a week’s time.

Remember this is your money. Quite possibly your retirement or money you are saving for your kids college. You can’t treat it like you do the daily newspaper. You need to make sure that the professional you choose to help you meet your goals, has your best interest at heart. If he/she doesn’t contact you at least every couple of months you need to find out why. Don’t be afraid to contact them and ask questions. In this relationship you are the boss. They are working for you and you need to be happy with the service. If not, like Dave says, fire them and move on.

Your doctor wants to see you at least once a year just to make sure everything is in order and nothing has gotten out of balance. He (or she) will want to run some tests, analyze the results and then determine if there are any changes you need to make to your routine. If everything looks good, you will schedule another appointment, and unless something major happens, you should be good for another year.

You should apply the same “annual checkup” to your 401(k) and IRA. This has never been more true than this year. I think we can all agree that 2008 could be considered something major. If you ignore your retirement accounts at this time, and something needs to be changed, a bad situation will only be made worse. So sit down, get comfortable and review the damage that 2008 has caused.

How to evaluate the situation

Dave Kansas at WallStreeJournal.com offers 4 suggestions that will help you perform your retirement fund checkup.

1. Stay diversified – if you were heavy in stocks before 2008, you understand how a lack of diversification can hurt you. While the stock market was losing over 30% last year, most bonds actually returned a gain for the year. A good mix would have help lessen your losses.
2. Don’t double down – if you are getting matching money from your company, make sure your match isn’t in company stock. If your company goes under (think Enron) not only do you lose your paycheck, but you also lose a large percentage of your retirement account.
3. Avoid inertia – with things going south, you don’t want to let things keep going. Revisit your investment strategy and make sure your account is structure to meet your objectives. With huge losses in the stock market, you may want to restructure your balances to get things back inline with your strategy.
4. Watch your costs – When the market gives way to the Bear, every penny sucked up by fees, makes your return look even worse. Make sure you are working with your broker to minimize fees in your IRA.

Set your appointment today!

The longer you put off your annual checkup the more likely you are to find things that need immediate attention. Agree now to set aside some time this weekend, with a cup of coffee and a quite room and evaluate where you are, and where you want to be. You very likely will need to make some changes here and there, but like your doctor will tell you, you health is one of the most important things you have. Take care of it.

On October 1, 2008, the stock market was trading around 11,000 points. Yesterday, February 20, 2009 the market closed just under 7400 points. That means the market is down over 2500 in just under 5 months. Most people have been riding a wave of fear with regard to what they should do with their investments. If you are unsure about how or where you should be investing your money, there are a couple of options for you.

Follow the pack

First, you could watch some of the shows on cable television and blindly follow the ‘hot stocks’ being pushed that day. The benefit of this method is there is little to no work involved for you. The downside is you have no idea why you are investing in that particular stock other than so-and-so said it was a good thing to do.

Invest your own time

Another option would be to do some research, read a few investing blogs and maybe even track a few stocks before you begin investing your money. This is a better plan, for a couple of reasons. If you are doing your own research, you are taking responsibility for your actions; that is good. You are also going to learn a little bit about the company or mutual fund before you invest your money.

Unfortunately, because of the massive amounts of research required to make really good investment choices you would need to spend a lot of time researching the companies that interest you. It could become a full-time job. Although this option is better than simply following someone else’s advice, I think there is a least one option that is even better. Instead of doing the research yourself, why not find someone that will teach you all about the ins and outs, ups and downs with regard to the investment world.

Find a teacher

I strongly encourage people to find a good, professional financial planner to help them with their investing. There are a lot of different ideas out there about why you should or should not pay someone to help you invest. To me it is kind of like paying a real estate agent to help sell your house. Do you need their services? No. Will you sell your house for more if you use a good agent? Definitely! The key is to get a good person to help you. Someone that not only offers advice but is willing to explain the benefit of the advice. The same is true in the area of investing. Finding someone that has been successful in good times and bad is not always easy, but if you find that person or company, their value could be priceless.

No matter where you are in your level of investment knowledge, Sound Mind Investing has something to offer. They have been helping people make wise investment decisions since 1990. Austin Pryor and his team offer Biblically based advice that has drawn praise from some of the most respected and well known Christian Financial leaders. If you would like to see what Sound Mind Investing has to offer, you can sign up for a free 30-day trial to their website. I promise you that you will gain insight and knowledge into the world of investing from a company that is not simply trying to make money, but instead they are focused on helping you.