March 17, 2011

Talking to Clients on Japan and Mideast Now: Keith Springer

Springer Financial Advisors’ founder publicly opines on market and world events, showing and training clients how to keep emotions out of investing

When it comes to communicating with clients over any concerns they might have about the markets and the economy, or the impact of disasters like Japan or the turmoil in the Mideast, Keith Springer says “I like to answer the question before it’s asked.”

keith springerSpringer (left), the founder and president of the RIA firm Springer Financial Advisors in Sacramento, Calif., says he doesn’t “react to events unless they have a consequence,” and in his judgment, the events in Japan  “will not have an effect on worldwide demand for goods and services; it won’t change.”

In fact, Springer views the Japanese earthquake and its after-effects as positive for the Japanese economy, at least in the short run, while acknowledging the tragic nature of the events for the people of Japan. “Now they have an excuse for borrowing and spending,” he said in a Wednesday interview, referring to the Japanese government and its central bank. “They’ve just gotten a hall pass” to print more yen that will stimulate the Japanese economy in the short term.

“It doesn’t help things five years from now,” he says, but “the 'market’ only cares about six months from now,” not the long term. That’s the case in the U.S. as well, he suggests, especially with our own government’s stimulus spending, quantitative easing (QE). In his latest communication with clients, it’s the eventual removal of QE that he’s worried about. “The stock market loves free money; it’s addicted to it like a crack addict to cocaine,” he said in the interview.

In his March 16 client newsletter he wrote: “The market is absolutely addicted to stimulus and absent of government intervention, the economy could easily roll back over.”  As for the Mideast and the oil scare, he says flatly that the price of oil was “over-inflated. Saudis are the big producers; it and OPEC” will keep the price of oil between $90 and $100 a barrel because “it’s in their interests to do so.” Higher oil prices, he suspects, would “slow down world economic growth much more than a natural disaster.”

Springer’s approach to proactively communicate with clients, as he did in his most recent client newsletter, helps him grow his advisory firm, he says. “My business has never been better than over the past few years.” He communicates with, and educates his clients, that it’s his job to take the emotional aspect out of investing, to take a macro approach, “I’m always looking top-down,” he says. His clients, he says, have been trained to “let me handle it; I have not gotten one call from one client,” about the events in Japan, though he says he got one e-mail from a panicky client asking if he should sell everything.

In communicating regularly with clients through e-mail, Facebook and through his blog, he’s informing clients that he’s “aware of what’s going on; that I have an opinion” on these economic and market events. “They know I’m not going to be perfect, but I’ll be damn close.” When informed that some advisors contacted for this article said they hadn’t reached out to their clients to educate or console over the recent events in Japan and the Mideast, he said that “most advisors are pretty much wimps," saying they take a misguided approach to client communications of "you don’t wake a sleeping dog.”

His conclusion on Japan? “It’s not the beginning of a stock market debacle like we had in 2008-2009.”

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