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December 23, 2020 at 01:34 PM
The stock market soared on the Food and Drug Administration’s emergency-use authorization for Pfizer’s COVID-19 vaccine, the first of many coming from big pharma companies. But maybe investors are just a little too jolly. Maybe even giddy. Could it be that what’s called for right now is some cautious optimism?
That’s what financial advisor Christopher Manske, founder of Manske Wealth Management, argues in an interview with ThinkAdvisor.
It’s more complex than just “There’s a vaccine! Everything’s great!” stresses the advisor, a 20-year Merrill Lynch FA before launching his own Houston-based RIA in 2012.
A former U.S. Army captain who served for six years in Germany and Bosnia, among other locations, Manske manages about $350 million in client assets.
In the military and as a financial advisor, Manske is all about preparing for the next crisis. “An uncertain future is what we can be sure of,” he contends.
In the interview, he recommends proactive steps to take for better insulation when the next crisis strikes. He focuses on 20 of these in his book, “The Prepared Investor: How to Prevent the Next Crisis from Affecting Your Financial Independence” (Changing Lives Press-Oct. 2020).
ThinkAdvisor interviewed Manske on Dec. 14, three days after the FDA announced its authorization for the Pfizer vaccine. Speaking by phone from his office in downtown Houston, the advisor argued that investors should anticipate potential distribution glitches and behavioral pushback on the part of Americans amid this and other vaccines’ rollout.
So bear in mind one of Manske’s proactive steps: “Don’t let good times affect your vigilance.”
Here are highlights of our interview:
THINKADVISOR: Do you discern a certain investor giddiness accompanying the Pfizer COVID-19 vaccine rollout? How should advisors be thinking about these vaccines when it comes to investment decisions?
CHRISTOPHER MANSKE: The market has viewed the [Pfizer authorization] as wonderful and reacted really positively. But the word “giddiness” strikes a chord with me because maybe they’re a little overly happy. Maybe there’s something that people are missing, and we’re a little bit too jolly about it.
What could be a stumbling block?
There’s still the rollout — the execution of getting the vaccine to everybody and what that really means. Are we going to need to travel with proof and show a card that we’ve been vaccinated? How would the public react to that?
What was your own reaction, then, to the vaccine announcement?
Cautious optimistic. People are like, “Oh, there’s a vaccine! Everything is great!” But it’s more complex than that.
Is this a time for FAs’ clients to change their investments?
No. And I don’t think we’ll see cautious optimism until after a full quarter of vaccination rollout nationally and internationally. Also, there’s a certain population that doesn’t trust that vaccination is the right thing to do.
Investors don’t have to be scared of the next unknown, terrible calamity — they can “just ride the wave with it.” You cite that, in your book, as the prevailing wisdom concerning financial crises. But you disagree. Why?
I disagree so strongly. Typically, Wall Street advice about crises is to stay the course, don’t make any changes, keep your head down and try to ignore what’s going on around you. All that is a passive wait-and-see approach.
How can preparing for a crisis help investors?
When you’re prepared, the crisis affects you differently. It’s like, if you carry a tire iron, a jack and a spare in your car, when you get a flat, you’re affected differently from someone who doesn’t know how to change a flat and doesn’t have the right tools on hand.
This year we’ve had simultaneous thunderbolts: the coronavirus pandemic and with it, a declining economy, including ongoing second and third economic effects. What can you say to clients who worry about what will happen to them now?
