Constructing and Managing an Investment Portfolio INTRO: We all are faced with the responsibility of investing for our future. Many of us question whether we’re doing it in the most organized, sensible way. Bruce Hagan certified financial planner with RAI Investments and Corporate Securities Group is here to tell us the steps to take in constructing an investment plan. Q1. Is there a foolproof method of creating a successful investment plan? A1. Well, there’s no one sure-fire method of creating a plan; the important thing is that you have a plan that gives you some direction and helps keep your emotions in check. I’m going to suggest a nine-step plan that many financial planners find useful. Q2. Great and our viewers may want to jot these down. What’s the first step? A2. The first step is the most important and really the most difficult: Personal Assessment. This entails soul searching to determine one’s goals, risk preferences, and investment attitudes. Q3. I can see where that might take some time. Next step? A3. Two steps actually follow. The first is to calculate the resources needed to meet each goal in the future. Next, step 3 determine how much of current monies and how much of systematic savings will go toward each goal. If you can see there isn’t going to be enough money to meet all the goals, some goals may have to be modified. Q4. For instance you may change your plans from sending a child to a private college to a public university instead. OK, step 4? A4. Step 4 is to develop the investment policy and strategies under which the portfolio will be developed. Q5. Next? A5. Step 5 is to set up the asset allocation model or broad categories in which you’ll want to divide your investments. And step 6 is to evaluate the political, economic and investment climate. If the economy were in a tailspin, you might want to proceed cautiously. Q6. Are we now ready to actually make some investments? A6. Yes we are! Once we have that asset allocation model in place we can begin evaluating individual securities or funds to fill in the categories. Q7. And what’s left to do, that’s only 7 steps? A7. Only now should you look at any investments that you already own and determine whether they fit into your plan. You may want to keep some or change some. Peter Lynch says; “Know what you Own & know why you own it”. And finally, you must monitor both the portfolio performance and economic conditions, but also your lifestyle and make changes that are necessary. The discussion offered above and in the movie should not be considered an endorsement by Florida State University. They are offered in the educational sense of providing thought-provoking information for our Web audience. Copyright shared with Florida News Channel (FNC), all rights reserved. Broadcast 2/5/99