"Would you tell me, please, which way I ought to go from here?"
 

"That depends a good deal on where you want to get to," said the Cat.
 

"I don’t much care where," said Alice.
 

"Then it doesn’t matter which way you go," said the Cat. – Alice in Wonderland

Would you set out on a journey without a clear idea of where you want to go and without a map to guide you there? Maybe if you’re a college student kicking around Europe for a summer. But hopefully not if you’re an investor. And yet that’s exactly what a majority of investors appear to be doing.

According to a Gallup survey, just 38 percent of U.S. investors have a written plan to help them achieve their investment and retirement goals. That’s up significantly from just four years ago when only 24% had a plan. Still, it’s a low number.

In similar fashion, according to a survey from the Employee Benefit Research Institute (PDF), just 48 percent of today’s workers have taken the time to estimate how much they need to save for a comfortable retirement.

During market boom times, you could blame the lack of planning on a false sense of security. It doesn’t justify the lack of a plan, but it may explain it. Today, though, with the market treading water after a remarkable more than six-year bull run, a written plan is a necessity.

What will you do when the inevitable bear market arrives? Is your portfolio structured, and are you emotionally prepared, to stay the course? Or, are there changes you will make when the time comes? (We’ll have an update on our bear market indicator in the September issue of the Sound Mind Investing newsletter, which will be posted next week.)

Keep in mind, portfolios and plans are different animals. Nick Murray, author of “Simple Wealth, Inevitable Wealth,” says it well:

A portfolio is not, in and of itself, a plan. And a portfolio that isn’t in service to a plan is just a form of speculation; it can have no other goal than to beat most other people’s portfolios.

But “outperformance” isn’t a financial goal. An income you don’t outlive – to cite one critical example – is a financial goal. If your portfolio “outperforms” mine, such that I run out of money when I’m 76, and you don’t run out of money until you’re 82, it isn’t going to matter much when we’re both 85, sitting on a park bench without two nickels to rub together between us.

We’ve provided guidance in the past about how to write an investment plan, and this would be a good time to review it. One point not made in that article is the importance of setting realistic expectations for the performance of your investments and benchmarking your investments’ actual performance against those expectations.

As Josh Brown has said,

Focusing on the performance or cost of a portfolio relative to something other than a plan is like decorating a house that has no foundation. 

Do you have a written investment plan? If not, why not? If so, what topics do you cover in your plan?