Plan for your financial future and diversify your investment portfolio while being on the look-out to take advantage of the current economic crisis.

That is what concerned investors were told by North Atlantic Asset Management's vice-president Patrice Horner at a meeting held at the Chamber of Commerce yesterday.

Among the topics covered at the BF&M Planning Matters event were long and short-term investments, insurance and inheritance, focusing on financial risks, identifying needs and building a solid plan for today and the future.

Ms Horner talked about the US government's financial bailout plan and the benefits it could offer while comparing it to the Resolution Trust Company, a US government-owned asset management company charged with liquidating assets of savings and loan associations declared insolvent by the Office of Thrift Supervision as a result of the savings and loan crisis of the 1980s.

"It is about putting in place provisions to help the people that are suffering from the financial crisis," she said.

"I think it would help shorten the time it would take to recover from the bear market and help the short and long-term recession because if the markets seize up many individuals and small businesses cannot borrow and the housing market is also going to be a key part in the recovery.

"I think it will be beneficial if it goes through."

She started by asking the audience if they were ready for what was in store financially, highlighting a number of issues which need to be considered, including education for yourself and your children, buying a house, raising children, family care for seniors and retirement and medical needs.

There were several ways of addressing these requirements, according to Ms Horner, ranging from having a budget, limiting your debt and assessing insurance needs and what it covers to making investments, putting in place an estate plan and knowing how your assets are going to be distributed.

As far as transferring risk was concerned, she recommended covering high-risk exposures with insurance, avoiding high cost/high frequency rates and reducing low cost/high frequency risks, while on the insurance front, medical, disability, life, property and contents coverage and checking limits and deductibles all needed to be taken into account.

"When it comes to investment planning, the most important thing is to be diversified," said Ms Horner.

"Limit possible downside exposure to an amount that won't derail your plans in the short run and select the right risk profile or allocation model."

She gave some examples of how best to allocate your assets and a comparison of growth between different investment risk levels, stressing the importance of a risk-averse plan, with flexibility to capitalise on opportunities at an early stage, and protecting your earnings through more conservative approach in later life.

"The message for retirement planning is not to be caught off guard, check where you are now and what it will take you to get to your goals and factor in all income sources like pension plans, social insurance and savings," she said.

"The risks to retirement include outliving your assets, the erosion of inflation, important investments, wrong withdrawal rates and excessive healthcare expenses."

Ms Horner then turned to what is happening in today's market and said the historical signs of recovery were good, with an average 30 percent fall in a bear market and a bounce back potential of 25 to 40 percent, while the market currently stands at 25 percent down in the US and 33 percent in Europe and Asia.

"Hopefully we are near the bottom and will recover soon," she said.

"What has happened this time was that easy money became available, with 1.5 percent interest rates for a long time so everybody was borrowing and lending and the banks were caught off-guard and started to relax their credit process and they sold their loans so they were not carrying the risk and did not have the inherent interests that were bad credits on their balance sheet.

"At the same time securities regulations were becoming more relaxed and a negative feedback loop was created, which the government is now stepping in to do something about because market values are so far removed from their real valuation."

But she argued that historically there should be opportunities to come out of the current economic turmoil, with some good value securities out there for investors if they know the right place to look.