With the continuing economic downturn, many folks are avoiding their portfolios. It's not surprising. After all, there are a lot more immediate financial concerns on people's minds. But now's not the time to put your head in the sand. If you want better investment results tomorrow, you have to have a plan today. And while there's no silver bullet for ensuring gains, you can take action to make sure you're still on track and prepared for whatever the future holds.

Whether you've been investing for a long time or are fairly new at it, there are four basic steps to making sure your investing plan is one you can follow no matter what the market it doing. Take these steps now, and you'll be able to look the economic new year squarely in the eye.

-- First and Foremost, Focus on Your Overall Mix of Investments. You've probably heard it many times, but the overall mix of stocks, bonds and cash in your portfolio -- your asset allocation -- is the foundation of your investment plan in both good times and bad. If you're comfortable with this mix, it's easier to stick with your plan.

However, during volatile markets, it's not unusual for an asset allocation plan to go out of balance. So you can't just sit back and ignore it. You need to make sure it's still what you want -- and make changes if necessary. Take a look at your asset allocation now. Start by asking yourself a few questions:

-- Has the percentage of stocks, bonds and cash in your portfolio changed because of market conditions?

-- What are your goals? Money that you plan to use in the next three to five years should not be in stocks.

-- How about your feelings toward risk? Have they changed? Given the recent market decline, does your asset allocation still match your risk tolerance?

If your current asset allocation no longer suits you, you need to get it back in line. This may require some rebalancing -- selling some asset classes and buying others -- to get back on target. For instance, if you started with an allocation of 65 percent stocks and 35 percent bonds and cash, and you now have only 50 percent stocks, you may need to sell some of your bond and cash investments and buy more stocks. With the current market, you may find some good buying opportunities.

Conversely, if market ups and downs have you thinking more conservatively, maybe the new balance is just fine. The important thing is to take an honest look and make appropriate changes now so that you can be comfortable with your allocation over the long term, even when there's a loss.

-- Make Sure You're Well Diversified -- Both Across and Within Asset Classes. Now take a look at the investments you own in each asset class. Do you have enough variety? Holding a variety of investments -- diversification -- is an important factor in controlling risk. In fact, how you diversify can be even more important than the individual investments you choose.

It stands to reason that you don't want your portfolio's health to be dependent on the performance of any one investment. For instance, if you own only one stock and it falls 20 percent, the value of your investments is down 20 percent. Add in even one more stock that rises when the other one falls, and you'll be in better shape.

Do you need to diversify more? Here are a couple of general ways to do it:

-- Diversify across asset classes. Invest in large well-established companies, smaller emerging companies and international stocks, as well as in bonds and cash.

-- Diversify within asset classes -- Invest in a variety of market sectors (i.e. technology, health care, energy), companies and countries.

In addition to investing in a number of individual stocks and bonds, consider investment vehicles such as mutual funds and exchange-traded funds (ETFs) as a possible way to help you create a diversified portfolio.

-- Consider Taxes. Where you hold certain types of investments -- whether in a taxable or tax-advantaged account -- can have an impact on the capital gains taxes you pay. In the long term taxes can represent a significant drag on your overall investment returns.

To lessen this tax bite, first make full use of tax-advantaged accounts such as a 401(k) or an IRA. Then, as you choose investments:

-- Place relatively tax-efficient investments in taxable accounts (e.g., stocks you plan to hold more than a year or municipal bonds).

-- Place relatively tax-inefficient investments in tax-advantaged accounts (e.g., stocks you plan to hold less than a year).

-- Monitor and Rebalance Your Portfolio To Stay on Track. Creating an investment plan is a great start. But now you have to stay on top of it to make sure it's still working for you. Resolve to check your portfolio at least once a year -- quarterly is even better. You won't always like what you see, but with knowledge and planning, you may be able to make it better.

Here's what to look for:

-- Relative Performance -- Evaluate your portfolio's performance using the right benchmarks. For example, if you've invested in U.S. large-cap stocks, measure the performance of your stocks against the S&P 500(r) Index. For small-cap U.S. stocks, you can use the Russell 2000(r) Index. International stocks can be measured against the MSCI EAFE(r) Index. Even if you feel your stocks haven't performed as well as you hoped, if they are matching or outperforming their index, they're probably still a good choice.

-- Investment concentration. Make sure you don't have too much invested in a particular sector, industry or company. For instance, no more than 10 percent of your stock investments in any one company (and preferably much less) is a good guideline.

-- Individual investments -- Check to see if the ratings on your stocks have gone down.

-- Put Your Portfolio In Perspective. Once you've reviewed your portfolio and refined your investment plan, put the performance of your investments in perspective. We all want better investment results, but investing is a means to an end, not an end in itself. Stay focused on your goals. Be disciplined and follow your plan no matter what the market is doing. And remember that long-term progress is ultimately more important than short-term performance.