Are your investments out of sync with your goals? How can you tell? A lot depends on the time frame you’re talking about.

"Short-term" refers to anything less than five years. During that time, you may be occupied with making sure you’ve got enough for things like a car or house, maybe renovating that house, or taking vacations with the family.

"Longer-term" goals, extending beyond that, could include sending a child to university, saving for retirement, and buying a property to spend that retirement on.

Once you’ve determined your investment goals, you must decide how much financial risk you are willing to take to achieve those goals. Different investments bring different levels of risk. Deciding what you hope to achieve will help you select an investment to meet your goals.

Experts agree, if you have less than five years, you shouldn’t be looking at equity mutual funds. You should be looking at money market or very short-term bonds. If you’re looking at less than 10 years, you shouldn’t be looking at equity mutual funds that have a long-term investment philosophy.

Make sure the goals of the fund you buy match your own investment goals. If those goals change from time to time, you may need to reevaluate those investments. For example, if your goal is growth, you should be picking something aimed at capital appreciation over the long term. If the goal is income, choose investments like bonds.

This cannot be reinforced strongly enough: always read the prospectus before, during and after investing. This important document describes the range of securities the fund may purchase, how it selects them, the types of securities it emphasizes, and investment practices the fund may use. The fund’s investment strategy must relate to its goals, and yours.

The risks inherent in an investment vary, with respect to how it responds to inflation, fluctuation in domestic interest rates, fluctuations in currency or political upheaval in the case of a foreign holding, whether or not an investment within a fund can be bought or sold (the "liquidity risk"). The bottom line is, unless you’re familiar with an investment’s risk, you won’t know what to expect from the fund’s performance or how to evaluate it properly.

Still, what you’ve put in to any investment, and any statement you receive in the future, represents only cold figures on a sheet of paper. People are emotional, and for them, money is emotional.

To help, schedule periodic meetings with a qualified Mutual Funds Investment Specialist to make sure your funds and your financial needs are in sync.

It’s not that difficult to manage money. It’s extremely difficult to manage your emotions. And if your emotions are coming into play on this fund, you are likely to sell it at exactly the wrong time.

Reprinted by permission of AIC Limited. Copyright 2004.

Mutual funds are offered through Credential Asset Management Inc. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not insured nor guaranteed, their values change frequently, and past performance may not be repeated. This article is provided as a general source of information and should not be considered personal investment advice, tax advice, or solicitation to buy or sell any mutual funds and other securities. ®Credential is a registered mark owned by Credential Financial Inc. and is used under license.

March 19, 2008