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Back in the days of the Roman Empire, generals returning to Rome from victorious battles were often honored in parades through the city. Through the celebration, a servant rode in the chariot to continually whisper in the general’s ear, “All glory is fleeting” as a warning against overconfidence.After a rather good year in the US equity markets, investors may be feeling a bit like a victorious Roman general, congratulating themselves on last year’s investment success. In fact, advisors to such investors may now have their hands full in keeping expectations of the coming year in check.

Last year’s advance in the stock market was probably beyond nearly all expectations and while such gains are welcomed, ‘caution’ should be everyone’s watchword going forward. There are many variables on the horizon that could make for a volatile year.

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For those in the financial world, the holiday season ushers in the appearance of market forecasts for the upcoming year. On occasion, a market forecaster may actually come close to hitting the bulls-eye on where the S&P 500 ends up year-end. That lucky guess (what these forecasts really are) may end up as a marketing tool for the forecaster to promote themselves for the next decade to future investors or subscribers.

For the most part though, forecasters end up being dead-wrong and remarkably so. In a recent blog post by commentator and money manager, Barry Ritholz, a circulated tally of fourteen major US financial institution forecasts for 2013 revealed year-to-date results that ranged from 11% to almost 30% off-the-mark. The average margin of error for all of these predictions was 16%. And this is not just a one-off year either. Financial author David Dreman made a detailed analysis of historical market and stock price forecasting in his book, “Contrarian Investment Strategies”, noting that forecasts of market and stock analysts are more likely to be wrong than right.

Why all the forecasts? Probably for the same reason people spend thousands of dollars on newsletters and “Special Investment” reports; that infallible but misguided belief that someone, somewhere has the Holy Grail system or the predictive ability to unlock investment riches for the lucky few who have the wisdom to plunk down their $39/month to gain access to supposed ‘secrets’. P.T. Barnum was a keen observer of human nature and his quip was well-placed about the perpetual, by-the-minute, renewal of candidates to feed this gullibility mill.

So just like the din of other white noise emanating from Money-vision and other media, such precise-sounding forecasts should be ignored. In the long-run, while some strategic asset allocation may be a good idea, market forecasts usually have little or nothing to do with sound financial planning and achieving one’s long-term objectives.

In a July 2012 report released by Consumer Federal of America and the Certified Financial Board of Standards, only 31% of the 1500 respondents to a May 2012 telephone survey said they had a comprehensive financial plan. Why so few?

The answer may lie in the misconception that a financial plan involves massive document-gathering, meetings, introspection, and time commitment. The task may seem so overwhelming that people are afraid to begin.

Beginning writers often face the same fear when starting a 350 page novel book. One technique used by seasoned pros is called the “Foolscap Method”. (‘Foolscap’ refers to ‘legal-sized’ paper measuring 8.5” x about 14”. Its name is derived from the imprinted watermark in 18th century England). The method is to get the structure and outline sketched out on one single sheet of foolscap, normally in three-four “acts” or sections. Once done, the rest is filling in the details. Instead thinking about the whole project, the writer breaks it down into manageable sections.

The core benefits are: 1) Getting the structure down on one page removes the excuse of “It’s too much”, 2) You see the project as a whole, from beginning to end on one sheet and 3) You boil down the goals into the essentials and avoid drowning in the details at the start.

For your financial plan, you break up the different areas into Acts 1, 2 and 3. Within each section, make three solid objectives you’d like to achieve. Why three? Because three seems doable and having just a few objectives helps with focus. Apple founder Steve Jobs used to ask his senior management team for 10 goals, then cross out all but three, stating it was better to focus doing three well, rather than many less-than-well.

If you’re having trouble starting a financial plan or getting your finances in order, try using a single-sheet of paper to get your thoughts, dreams and ideas down and keep it simple. Often, simpler is better.