Market Volatility: 10 Ways Advisors Calm Client Nerves

The abrupt volatility across the financial markets last week was a call to action for financial advisors. But, as professionals overseeing the life savings and investments of their clients, that action was less about portfolio management than it was about managing client stress levels.

Following the Wall Street adage in times of market unrest to “don’t just do something, stand there,” we offer 10 examples of what advisors are saying to clients when the stock market is pulling back.

Glenn Downing, principal at CameronDowning Inc. in Miami.

“The stock market does not equal the economy, and the economy does not equal the government. These are three separate entities, each of which affects the other to a degree.

“Beyond that, we know that the stock market reprices itself daily. Quality companies are still quality companies even when the stock price drops.”

Thomas Balcom, founder of 1650 Wealth Management in Lauderdale-by-the-Sea, Fla.

“Data. That's the advice we share with clients during market selloffs. We explain to them what is happening and why it is happening.

“This proactive approach prevents us from having a number of nervous clients call us with concerns about their portfolios. We let them know what caused the recent selloff and whether or not we should be overly concerned about its impact on their portfolios.”

Ray Eustace, founder of Eustace Advisors in Cary, N.C.

“I encourage my clients to adjust the default time period on their investment performance and market performance graphs when they log into their financial accounts and apps to five years or 10 years, and definitely avoid a default setting of year-to-date or shorter.

"I promote this to temper both the short-term euphoria of highs and the hysteria of lows.”
 

Jarrod Sandra, owner of Chisholm Wealth Management in Crowley, Texas.
 

“Stop watching and reading the news and re-read your financial plan that accounts for your life and circumstances.”

Josh Radman, founder of Presidio Advisors in Denver.
 

“One of the first things that I tell my clients to do is to assign a job-to-be-done for every dollar that they have invested. That job includes not just a use case, but a use-by date as well.
 

“This type of segmentation helps my clients and me proactively avoid either taking on too much risk or not taking enough risk in a particular portfolio while also mentally preparing for high volatility in the long-term accounts.”
 

Matt Cooley, founder of Inspire Wealth Partners in Boise, Idaho.

“I've been telling my clients that it’s okay to feel unsettled and maybe even a bit fearful. The unrelenting bombardment of news and the velocity in which it travels only adds to our anxiety.

“However, market volatility provides an opportunity to take a step back and reconnect with the purpose for why we invest in the first place. For me, investing presents me with the greatest chance of achieving my goals in life, which include making memories with family and friends, and positively impacting my community.”
 

Michelle Petrowski, founder of Being in Abundance in Anthem, Ariz.

“Money is emotional, and I think it’s important to acknowledge that.

“Revisit your values, goals and different intentions for buckets of money. Many investors have not lived through a 2008 scenario and have gotten pulled in by the fear of missing out on increasing markets in the last 10-plus years.

“Is your money for a car, to buy a house, or to fund your daughter’s wedding? So now may be a great time to reevaluate where your money is invested, look at what your risk capacity is and realign those buckets with your values.”
 

Daniel Galli, founder of Daniel J. Galli & Associates in Norwell, Mass.

“Short term investor is an oxymoron. If you need to spend this money in the next three-to-five years, it shouldn't be in the market.

“If your time frame is 10 years or longer, who cares what the market does this year or next year? What matters is what happens over the next 10 or 20 years. During that time, you accumulate more shares through dividend re-investment.

It's all based on the assumption that well run companies know how to make a profit in all kinds of conditions and, over the long run, that attracts investors which is reflected in the share price.”
 

Karen Ogden, partner at Envest Asset Management in Ridgefield, Conn.

“I am not a great flyer, but when a pilot comes on in a completely calm voice during the bumpy ride, it helps me because I know the pilot is trained and, more importantly, has seen this many times before.

“Markets are the same. Those of us who read about them constantly and are students of market history and see the charts and internalize them, know that some sort of panic happens every year.  It is to be expected, and it is invariably the worst time to take action, unless possibly you have some cash on the sidelines to put to work during a big down day.”
 

Gerika Espinosa, financial advisor at Desert Mutual Benefit Administrators in Salt Lake City, Utah.

“The stock market is allowed to have a bad day, month, or even year. Just like you. In the end, it will all work out. 

“The good news? Usually, the best days and the worst days of the market happen in the exact same week. Good days almost always follow the bad ones.”