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The Problem With Showing Clients Short-Term Results

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During a recent client review, the performance report indicated that his trailing returns were approximately +22.0% (12 months), -1.20% (three months), and -0.10% (one month). During the same periods, the market returns were +12.0%, -15.0%, and -5.0%, respectively. In short, the client’s portfolio did very well compared to the market. What do you think the client saw? The client saw the two negative numbers and suggested that perhaps the money should be kept in a savings account.

This particular client is a pleasure to work with, but admitted they are unfamiliar with the markets. The moral of this story could read; “Exclude short-term periods,” or, “Make sure the client understands that short-term results are not the focus.”

Sometimes it may not be wise to show them to a client, especially if that particular client assigns undue importance to them.

After all, we live in a society where instant gratification is the norm, fed by television’s sound bites. In the future I will be more cautious about showing short-term results. It’s also important to educate the client on prudent expectations. After some discussion the client understood and now everything is fine.

A New Frontier (At least for me)

Have you ever wanted to host a Webinar, but lacked the knowledge to do so? This was the case with me. However, thanks to Matt with Advisor Portal, I am now equipped to host Webinars. Advisor Portal provides a number of services including Web site design, online document storage, and the aforementioned Webinars.

To conduct a webinar, I simply direct the client to my site, have them log in to their portal, and click the Webinar button. Then, they select the wWbinar link and the rest is academic.

There are a few good reasons to conduct client Webinars. For clients who live farther away the answer is obvious. For other clients, especially the busy, working professional, this saves time. Think about it. Clients can break for lunch, have a sandwich, and attend your presentation in the comfort of their office. This is an efficiency booster. I wouldn’t necessarily use this in lieu of face-to-face meetings, but for some clients, this will prove very beneficial. In addition, you can give presentations to prospective clients as well.

The New Tool

In recent postings, I’ve mentioned the new portfolio management tool from Gravity Investments. While I scale the learning curve each week I am finding it to be one of the most intriguing programs I’ve seen in my 25-year history in the business. I’ll write more on this later.

Is the Bear Growling Again?

With the 10-Year Treasury yielding less than 3.0%, a large drop in consumer sentiment, persistent high unemployment, and a Fed projecting a slow economy for Q3 and Q4, it doesn’t seem as though the financial markets will perform very well in the near term. We’ll talk more about this later.

Thanks for reading!


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