What to look for in a Financial Planner

First, and foremost, your financial planner should have impeccable credentials. They should be free of black marks on their regulatory or disciplinary records. Second, they should act solely in your best interests, not theirs or act on behalf of their company's product.

Ask if they receive a commission for any product they suggest. It's okay to ask questions. In fact, be a pest!

Remember that there is no such thing as low risk, high return. And "market timing" is a myth. You cannot ride the market like a roller-coaster and think you know when to get off.

Finally, no one can predict certainty. As we all know, life is unpredictable. So be conservative and recognize your own limits. Most people aren't honest with how much investment risk they can handle. Try and visualize how the risk you face may actually play out. For example, if you have $1000,000 to invest with high risk, ask yourself how would your life change if in a year your investment dropped to $70,000? Gaining an accurate assessment of your risk tolerance is very important!

For more information reference Ron Lieber's article "Rules for the New Reality" NYT (February 26, 2009)