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Looking at your life 30, 40, or 50 years from now, you can hardly be sure of what’s really in store for you. You may have some idea of what it’s gonna be, but you can’t really be certain about retirement. What are you going to do when your hard earned assets have lost their value in time? This dilemma is not solely caused by market downturns or other problems such as the Social Security System.

The culprit that we’re referring to here is no other than inflation. Yes, inflation is much larger than you think. It can ruin everything you’ve worked hard for, if you’re not prepared.

Well, for starters, let us examine what inflation can do. Inflation can wreck havoc on the value of your property or wealth for that matter - little by little, year in and year out. Surely as the Earth revolves around the sun, prices will continue to rise; as time goes by, what money you have will afford you less and less.

However, you need to understand that the Consumer Price Index, being the usual gauge of domestic inflation actually warps the whole picture of inflation and its real impact. In the United States, the level of inflation is really not that far from the 7% level the rest of the world is experiencing.

If you’re the type of investor who prefers to play it safe, you will most likely invest in bonds just to escape the chaotic situation in the market. You might even put your money in Treasury Inflation-Protected Securities, but still, as inflation worsens, you will find your money leaking out each year at an alarming pace.

Unfortunately, in investment, there is such a thing as being too safe. If you put your hard earned cash in “safe” money-making securities, by the time you’re about to retire, you may find that you’ve lost the value of your investment, at a rate faster than what you thought can be the worst thing that can happen to your money.

Where then should you place your money?

What you should do is look into stocks that are swinging into the right direction, such as stocks that are closely tied to the developing economies of China, India Brazil, and Russia. This can involve investing in companies that are foreign commodities-based as well as foreign banks.

The wise investor must always be prepared to take advantage of the opportunities offered by international growth.

This just goes to show that in order to be able to curb the effects inflation you must have foreign holdings. Aside from the benefits of a diversified portfolio, there’s an even greater benefit - the promising returns of foreign stocks.

Here are some quick tips for you if you’re thinking of hiring a financial planner. You must take them into consideration before you hire one, or you could be in danger of not getting the best you can, or worse.

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Make sure they’re competent

You have to ensure that your planner has the right credentials. Refer to an earlier article of mine which shows you what a Certified Financial Planner is.

Just Investing is not enough

Remember that you want someone who can advise you on a range of financial topics including insurance and mortgage payments. Planning doesn’t end with just investments.

Know how your planner is making his or her money

You need to know how much of a vested interest a planner has in recommending a particular product. If he is getting a cut out of whatever he sells to you be wary of his advice, as it is unlikely to be dispassionate.

Check and see how well he gets to know you

You don’t want someone who is looking to push their own agenda onto you. What your planner feels are the right life goals may not be what you think are the right life goals. For example, if he feels that you need to start saving for your kids college fund, and doesn’t take your word for it that you don’t ever plan to have kids, reject him. You’re hiring him so that he can advise you on how to reach your goals, not so that he can decide your goals for you.

If you’re a typical married person, chances are that your estimates on the state of your partner’s finances will be way off. The results of a study conducted in 2003 show that over 35% of people are unable to accurately pinpoint when their spouses were planning their retirement. The situation was the same when they were asked to assess their spouse’s net worth.

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But this is rather understandable. As a married man, I know that finances can be a touchy topic. Specially if the marriage takes place late in life, there is an awful lot already going on before the couples tie the knot. Some financial details are just embarrassing, and sometimes, querying about them looks like a threat to the other person’s independence.

But apart from maintaining a healthy relationship, there are more hard economic reasons why you should keep yourself informed about what your spouse is upto. The main reason is that without that data, you will be in tailspin when your partner is missing. Either they has passed away or (God forbid) you are going through a divorce, you need to know what is what so that you don’t make a major mistake in the first case, or significantly lose out in the second.

Important things to know are your partner’s various sources of income, not just the salary, but bonuses and commissions, their investments, Insurance schemes, and their debt status. Any of these can have a significant impact on your own financial decisions, and after all, you do want to make the best ones right?

The United States Ethanol Industry benefits mainly from federal subsidies, tariffs, and production mandates. Oil refiners get a credit of 51 cents per gallon of ethanol blended with gasoline. The typical blend is 90% gasoline/10% ethanol. Due to a federal dictate, more than half the gasoline sold in the U.S. now contains ethanol, which accounts for 7% of total gasoline consumption. There is also a 54-cents-a-gallon tax on imported ethanol. The government mandates that 9 billion gallons of ethanol be used this year, rising to 10.5 billion in 2009 and 15 billion by 2015.

Critics make a valid point that ethanol producing companies are only surviving because of strong backers in the Capitol Hill. Ethanol is also widely criticized as a wasteful and inefficient way to fuel automobiles.

Oil refiners are blending ethanol on their gasoline because it makes economic sense. Ethanol now costs $2.50 per gallon — or about $2.00 a gallon to refiners after the federal subsidy. The wholesale price of gasoline is above $3.30 a gallon.

This means that refiners save about $1.30 per gallon by using ethanol rather than pure gasoline. The savings per gallon of a 90/10 blend of gas and ethanol relative to pure gasoline is about 13 cents (10% of the $1.30 differential between ethanol and gasoline). Much of that gets passed on to consumers.

Ethanol may be controversial, but it has powerful friends in Washington and is helping millions of cash-strapped Americans save money on gasoline. This suggests that the ethanol industry is here to stay.

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Asian stocks drove the benchmark index down, amid a worsening credit-market as losses pile on top of the other. Speculation has it that the high borrowing costs might lead to steep declines in earnings.

When Lehman Brothers Holdings Inc posted a loss of about $2.8 billion other firms followed suit, and Macquarie Group Ltd. as well as Babcock & Brown Ltd. also incurred heavy losses as they plunged hard in Sydney trading.

The Industrial & Commercial Bank of China Ltd. declined after a government mandate telling the banks to increase reserves. This would be the fifth time Chinese banks will be increasing reserve in 2008. Orient Overseas International Ltd. came down ahead of other shipping companies on speculation that surging oil costs will pare down profit.

The MSCI Asia Pacific Index fell by 2.1 percent to 144.26. There were about six stocks that incurred losses for each one that gained. The outlook is bleak as financial and industrial stocks declined, pulling down the rest of the 10 industry groups with it.

It will take a very long time - up to several years - before the present credit problems can be sorted out within the system. What we see now is a market that’s highly reactive to rising interest rates. It is this fear that’s making the market highly volatile nowadays.

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Hong Kong stocks came down dragging the benchmark index to its steepest drop ever in a period of three months, following China’s announcement to the effect that banks should increase reserves, which if ever, would be the fifth time in 2008.

One of the biggest loser recently was Industrial & Commercial Bank of China Ltd., which is China’a largest bank in terms of its market value. The bank’s losses was the most experienced by it in more than four months. Hang Lung Properties Ltd. also fell and led other developers down the losers’ path. Cathay Pacific Airways Ltd., the largest Hong Kong airline, fell heavily in a span of time that exceeds two months after the cutting of its rating to sell by UBS AG.

The Hang Seng Index declined 3.6 percent or 870.25 to 23,531.93, which was the company’s hardest fall counting from March 17. The Hang Seng China Enterprises Index, which tracks mainland Chinese companies’ H shares, plunged 5 percent to 12,835.70, the firm’s biggest loss since April 14.

“Things seem to be worse than expected and general market sentiment is being hit. We tend to favor energy stocks, but avoid oil users given rising oil prices,” according to portfolio manager Nancy Lee, Taifook Asset Management Ltd., Hong Kong.

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Australian banks declined as they led the S&P/ASX 200 benchmark to its steepest fall in a span of three months. This came after Lehman Brothers Holdings Inc. posted a total loss of $2.8 billion while the Federal Reserve of the United States indicated that they may hike interest rates.

The S&P/ASX 200 Index came down by 154.60 points to 5,437.50 or a 2.8 percent change, and the All Ordinaries Index fell down by 2.6 percent or by 146.90 points to 5,544.30.

The largest Australian securities company Macquarie Group Ltd. lost A$4.19 to A$51.80, a change of 7.5 percent, which was the worst decline counting from March 13. Another company that lost a sizeable amount of money was Babcock & Brown Ltd., which is Australia’s second largest investment company. The firm tumbled down 74 cents, or 6.6 percent, and is now down to A$10.42, the company’s lowest price counting from May 2005.

National Australia Bank Ltd., also came down A$1.57 (5.3 percent) to A$27.95. Commonwealth Bank of Australia was not spared as it hit bottom at A$1.53(3.5 percent) to A$41.87, the lowest decline since March 17.

Chris Davis whose father founded Davis Funds, and co manager of Selected American, has his own steely views on how to navigate the waters of a rough stock market. His strategy essentially involves a lot of nerve, which could mean taking advantage of Bear markets and investing. Penelope Wang, Money Magazine senior writer, interviewed him recently, and his comments are sure to be of some help to those who need guidance.

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One of his insights he claims to have derived from his Grandfather Shelby Cullom Davis who made a pile of cash out of Insurance stocks. He said that one makes most of their money in a bear market. But you don’t realize it at the time. An example, is Chris’s purchase of DSP Merrill Lynch stocks which have suffered heavily in the past year.

His mantra is to keep holding stocks, and in fact, most of his portfolio is made up of stocks that have been in it for at least 8 years! He says that often the best strategy is to sit still when in trouble. This is rather akin to a deer freezing when a tiger approaches, and is so still that it gets passed by. Perhaps the average investor should just put a blindfold over his eyes, and simply take what comes, all the while regularly investing, and averaging themselves out.

If there’s one emotion stronger than love, that can make a person lose their head, it’s fear. We humans are so attuned to this emotion, that it can completely ruin our chances of making rational decisions. It sends us into a flap and a tailspin.

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If fear didn’t affect logical judgments, the stock markets would never plunge for days in a row. Given that people feel that there is a recession, there is no end of advice on how this is the time to invest in bonds, and stabilize your portfolio.

The sight of your savings losing money can be a frightening sight. But if you have 20 or more years of investing time left, then the best thing to do is to shut your eyes, and keep on regularly putting money away. This can be very difficult as our brain tells us that we must run. But it’s precisely because people give in to their emotions, that they end up making terrible choices. Even in the worst recessions, the stock markets gained over an average of 5-8 years, with not bad returns at all.

A systematic investment plan should be stuck to at all costs and quietly pursued until the goal is achieved. Relax and stay focused, and don’t listen to the fear mongers out there.

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UK stocks declined this week for the third day. This decline was headed by travel companies as well as banks, following a New York oil rally and a report that revealed the worsening state of the labor market in the United States which gets increasingly severe as US unemployment rate exceeded May forecast.

As is the usual case with airline companies, British Airways Plc is closely tied to fuel prices and expectedly declined as crude oil soared above $130 per barrel. Standard Life Plc also led financial companies’ decline following Deutsche Bank AG’s recommendation regarding the selling of investors’ shares. However, commodity producers such as BHP Billiton Ltd. and Tullow Oil Plc, realized some profits, which in a way has curbed declines in these companies.

As oil prices rebound sharply we can see how volatile the market can be. It is indeed a dangerous thing to just begin playing those stocks that stand to lose from surging oil prices such as airlines.

Europe’s biggest airling, the British Airways, lost 7.2 percent or 236 pence. The world’s largest cruise-line company, Carnival Plc, declined 3.4 percent to 1,875 pence.

The FTSE 100 Index has gone down 54.8, or 0.9 percent, to 5,940.5 at 3:39. This week, it has extended the loss to 1.8 percent. Whereas, earlier, the measure gained up to 1.3 percent. As the regards the FTSE All-Share Index, it came down too by 0.5 percent.