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Portfolio > Economy & Markets

My View on the Markets and Articulating It to Clients

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As an independent advisor I have no hierarchy dictating policy to me. Additionally, developing opinions on the state of the economy and the financial markets are solely my responsibility. Sure, they are derived in part from various sources. But in essence, the final assessment is up to me. 

Clients also have an opinion on the global situation to some extent. This is an important point because if the client believes that things are rosy and it’s time to be aggressive, and you believe the opposite is true, then this disparity can cause a disconnect. Therefore, it’s important as an advisor to have a clearly defined view and articulate it to your clients. Moreover, when you do this, and the client buys into your view, then you have the recipe for a long-standing relationship. How do you develop your view and how do you articulate it? 

I will attempt to answer these two questions, but first, I am not claiming that I cornered the market on forecasting. However, although I do have a firm conviction pertaining to the state of the global economy and the financial markets, in this post I will only attempt to explain how I develop my view and how I articulate it to clients. 

First, every person is a unique individual. Obviously, this includes advisors as well as clients. Moreover, each person has a distinct personality and a preferred method of communication. Some clients don’t want to know the details and some do. On the other hand, some have a propensity to grasp financial concepts and some do not. Let’s begin with the first question. 

There are a few individuals whose opinions I respect. I’ve written about this before and so I will only mention a few. I value the opinions of the brain-trust at PIMCO, the James Funds, and Rick Santelli and a few others from CNBC. Recently, I found an amazing add-in to Excel from the Federal Reserve Bank of St. Louis. It provides a plethora of economic data on a number of key statistics. Armed with this information, I can analyze economic data for the U.S. and several international markets. In addition, I can merge data and use any formula within Excel to formulate my opinion. 

To communicate my view, I write a monthly newsletter which is emailed to clients and others on the list. Also, whenever I conduct quarterly reviews, I share my thoughts at that time. 

Thanks for reading and have a great week!


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