How to Protect Your Retirement Savings

Bob Nelson CLU, LUTCF, 2002 president of the National Association of
Insurance and Financial Advisors (NAIFA), outlines some of the basics in
investment and retirement planning:

- Diversify your investment portfolio."Diversification means
that you have selected investments that work opposite of each other,
where if one is down, the other investment section of your portfolio
is up," Nelson says. "It spreads the risk and allows you to weather,
in the long run, the ups and downs of the economic market. It is
obvious that this was not the case in the Enron situation, where
the employees who lost most their retirement savings invested in
a single holding, Enron stock."

- Develop a plan that takes into account the risks
associated with the stock market. "In good times, especially
prior to the burst in the dotcom bubble, everybody thought there
was no way to lose in the stock market. And the reality is there
is always a way to lose in the stock market," says Nelson. "An
investment in a single holding is wonderful on the upside. There
are many emotional reasons to get on board. But in the worst case
scenario, you have no safety net."

- Seek professional advice. "Federal Reserve Board Chairman Alan
Greenspan said Americans lack a basic understanding of the financial
markets. This begs the issue that what you need is professional
financial help," emphasizes Nelson. "When you also consider the
tumultuous markets we've had in the last two years, it's clear that
a professional guide is your best ally."

Founded in 1890 as the National Association of Life Underwriters,
NAIFA is comprised of 900 state and local associations and
represents the business interests of 80,000 life and health
insurance agents and financial advisors nationwide. Many of
NAIFA's members are NASD-licensed registered representatives
or registered investment advisors. The NAIFA umbrella includes the
Division of Financial Advisors and three specialty organizations:
the Association for Advanced Life Underwriting (AALU), the
Association of Health Insurance Advisors (AHIA) and GAMA
International.