Rebalance your finances during these tough economic times to reap the rewards in the long-term.

That was the message from North Atlantic Asset Management's investment manager Miguel DaPonte to the Chamber of Commerce members attending a meeting held at its offices yesterday.

Mr. DaPonte stressed the importance of striking the right balance between asset allocations to ensure that investors make the most of their stocks when the markets are up and bonds when they are down.

"One of the that people suffer from the most is that they do not rebalance their finances," he said.

"You can either sell high and buy more bonds or you can change future allocations.

"It is highly important and often a fact that people miss in the long term."

Mr. DaPonte stressed the need to budget, limit debt, assess insurance, have investments and an estate plan in place and plan for retirement. He revealed a startling statistic that 43 percent of workers and spouses do not know how much they need to set aside for retirement.

But he said the number one rule was to start saving as early as possible, giving the example of how much needs to be invested at the ages of 25 ($381 per month), 35 ($820), 45 ($1,920) and 45 ($5,778) to accrue $1 million by the age of 65.

"In today's day and age you do not even know if $1 million is enough to save for when you retire," he said.

"Probably the best thing you can do is to select the right risk profile and as you progress with age if you change that it should really help you out in the future."

Mr. DaPonte said the key was to be diversified, limit possible exposure to an amount that will not derail your plans in the short-run and to choose the right asset allocation model, using a combination of stocks, bonds and cash in your portfolio.

Among the factors which go into building a portfolio, he said, were performance, risk, style, diversification, fees and expenses, and management tenure, while the types of risk to consider range from market timing, inflation, credit, industry and company, market, interest rate, reinvestment, liquidity, political and economic, and currency.

"You are looking for long-term managers that have done well in the past," he said. "We always take performance into consideration and pick the best funds with the least amount of risk."

Mr. DaPonte highlighted the significance of spreading your risk among several different investments rather than confining it to one or two options.

"As an average investor you are better off in a 50:50 portfolio," he said.

"The important thing is to know as an investor is that as you go through your lifecycle and as you change you should go from a high risk portfolio down to a low risk one. The emphasis is on growth and long-term asset appreciation."

He said the general rule of thumb was to subtract your age from 100 and the difference would be the percentage of your portfolio that needs to be put into equity investments, being reduced and switched over to fixed income as you get older.

And he offered some words of encouragement to investors worried about the state of their pensions and investments in the current climate.

"The current financial crisis looks pretty awful, but there is some light at the end of the tunnel," he said.

"I think the US is in a recession already because of the stock market performance after two negative quarters of GDP(gross domestic product) have been reported, but it is just a matter of when are we going to see a turnaround," said Mr. DaPonte.

"The equity markets tend to anticipate recessions, so if you think the end of the recession is going to be six to 12 months from now, then maybe it will turnaround at the start of next year."