What a Difference a Week Makes

What a week in the market! My wife and I decided at the last minute to take a cruise. It began on Monday and the Dow industrials went down 775, then up 500 on Tuesday, then down, down, down (Yes, I was checking the markets regularly). What should an advisor do? Somewhat surprisingly, I have not been receiving phone calls from worried clients, even though they have a reason to be. The truth is I’m probably more worried than they are. My most aggressive client, in terms of asset allocation, is just under 55% stocks. Most of my clients are around 35% +/- and even with that conservative mix, the accounts are still trending down. I recall during the bear market of the early 2000s, clients with less than 20% in stocks, roughly speaking, were still seeing their portfolios grow while portfolios that were more aggressive than this were seeing losses. At least that was my experience.

Perhaps the most important role we, as advisors can play in times such as these is to call our clients and reassure them. Reassurance is a funny thing, though. It goes well beyond the usual, “Don’t worry. The markets will come back.”