It’s hard to believe that 2009 is already coming to an end. As we look back over the year in the financial world, it truly has been a year to remember. We started the year in the midst of a global financial crisis. The markets were in a freefall and more than once I wondered whether our financial system was going to come crashing down around us.

It was a year that tested our faith in that financial system. As a financial advisor trying to help guide my clients through a very difficult time period, I admit to questioning whether the advice I was giving was proper. It was a very emotional period, especially in February and March, when the little bit of stability we saw in January disappeared and the markets hit fresh lows.

For my entire career I have advised clients not to give in to the emotions of the markets. Making investment decisions based upon fear or greed can wreck an otherwise solid long-term investment plan.

But this time it felt different. There were many days when I wondered whether I should advise clients to stop the bleeding, cut their losses, and retreat into the relative safety of cash…or their mattresses. It was a very difficult time.

It became even more difficult when I reviewed the monthly reports that I use to keep portfolios in balance with their target allocation. The reports indicated that, in order to get the portfolios back to the proper allocation, we needed to buy some stocks and sell some of the safer, fixed-income holdings. Nobody wanted to buy stocks early this year. And everybody wanted to buy the safety of short-term government securities. It was just the opposite of what our strategy was telling us to do.

There were many client meetings and phone conversations. We needed to confirm that long-term goals had not changed. We also needed to confirm that, despite the losses we were experiencing, that lifestyles were not dramatically affected. If the losses would affect upcoming cash needs, we would need to make some changes to our plans.

Those meetings also presented a good opportunity to confirm whether our asset allocation mix was appropriate, based on the risk tolerance of each client. It’s easy to say that you are comfortable with risk when things are going well. It can be a different story when things aren’t going so well.

As hard as it was, we stayed with our plan. And so far it has worked out very well. The markets have recovered dramatically since hitting multi-year lows in March. However, I can’t say that we are out of the woods yet.

We approach 2010 with a little more confidence than we had a year ago. The economy seems to be recovering and the housing market has shown signs of stabilization. Consumers are a bit more confident and we have seen an increase in our savings rate. But unemployment is still a problem and troubled mortgages in both the residential and commercial real estate markets continue to be a concern.

This is the time of year when you will hear all kinds of predictions from all types of prognosticators. My advice is to either avoid them completely or to use them for entertainment purposes only. The financial markets are, and will continue to be, very unpredictable.

Don’t risk your financial future by making investment decisions based on predictions or emotions. Have a plan and stick to it. It is not always easy, and at times can be very difficult. 2009 proved that in a very dramatic fashion.

Happy New Year!