Planning for your financial direction can be difficult.  At times 
it may even be confusing and frustrating.  Important questions 
arise both before and after we make decisions.  Is this the right 
financial product or did we make the right decision?  We have 
several paths to choose between now and our future and there is a 
wealth of information at our finger tips.

Due to the abundance of information, a person reaches a financial 
fork in the road and must make a decision.

Unfortunately, the routes of choice may seem more like a plastic 
fork in the road—brittle and inefficient.  We require reliability 
and assurance, not fragile opinions.  It isn't until our journey 
concludes that we may evaluate our progress.

During the journey, you will be faced with several twists and 
turns; risks that may affect your future and the future of 
others.  Purchasing power risk is the quiet storm on our journey 
and has the potential to break that plastic fork in the road. 
Also known as inflation, it is the uncertainty that future costs 
will erode your purchasing power in obtaining goods and services. 
This enemy of your savings has the ability to consume your 
capital.

An often overlooked type of risk is reinvestment rate risk. This 
is the risk associated with reinvesting the earnings on your 
principal at a lower interest rate than the initial investment. 
With another meandering path at your footsteps, you may wonder: 
Will I earn more or less than the anticipated yield once 
dividends accrue?

Finally, we have market risk. Market risk is simply the 
uncertainty of price movement.  This definition applies to 
several asset classes such as stocks, real estate, bonds, and 
collectibles.  Price fluctuations typically prove to be a bumpy 
ride, thus a map of our financial journey may include multiple 
routes and diversification.  Remember, as prices of multiple 
asset categories move, some will move inversely.

There are several ways to cope with the risks mentioned in the 
above text as it pertains to your unique portfolio.  One 
immediate way to deal with several types of risks is to review 
your current financial plan and asset allocation.  There may be 
potholes that require filling or directions that should be 
avoided.  As with diversification, it cannot eliminate all 
aspects of risk; however, it may help prevent dependence on any 
one over-weighted position.

It helps to keep aware of your goals.  This allows for a clear 
focus.  Also, periodic reviews are important.  If it is once a 
year or more often, schedule a time with your portfolio to 
confirm you are on the path toward financial happiness.

The road to a smooth financial plan may have several plastic 
forks in the road.  When faced with a decision, the educated 
person will better understand his/her destination and the route 
that precedes it.  You must navigate through these alternatives 
to have a happy future. 

Wardlaw's belief is that familiar life elements best illustrate 
practical investment strategies; not typical investment jargon.  
With that philosophy, the author assists financial 
planners/advisors, brokerage firms, periodicals, and other 
investment information syndicates create informative and 
entertaining articles.  For comments and questions, please 
contact the author at tools2invest@yahoo.com or visit 
http://www.tools2invest.com