Dealing with the ups and downs of this market

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Since this is a holiday shortened week I won’t be posting much. I plan to put up this mini post, another piece tomorrow, and maybe one more towards the end of the week.

Reassuring clients

Not to mention, there has been a tremendous amount of market volatility lately that has kept me very busy speaking with many of my clients, which brings me to the point of this post.

In my opinion, during rocky times like these, is when a good financial advisor earns his keep. A good financial advisor makes sure clients can always see the forest from the trees.

These markets can create ill will

If you’ve been following the US equity market then you know it’s been a trying last few weeks. There have been some big market swings (mostly to the downside) caused by credit risk and lending concerns. No matter how diversified you’re equity portfolio is, chances are you’ve seen it go down in value.

This can bring a lot of raw emotions to the surface for many an investor. Much like being on a boat during a bad storm, the ups and downs can cause a lot of people to feel a bit queasy.

Putting things in the proper context

So I thought this would be a good time to highlight a few posts I’ve written that deal with the psychology of investing, the value of a solid financial plan, and how a good advisor can help you to weather these choppy investment waters.

• The real benefits to the financial planning process are mostly psychological.
• Sailing takes me away is a little analogy to go with the previous post.
• Here’s a link to a section talking about gaining clarity on your situation.
• A financial plan can steel a client’s resolve and bring a modicum of predictability.
• You can never strip the emotions out entirely.
• My take on when a good financial advisor earns his keep.
• Ofcourse it doesn’t always end well, plan or no plan. Here’s an excerpt from a piece I wrote on October 15th that turned out to be somewhat prophetic and an analogy to drive home the point, about the same client.

That should keep you busy for a little bit.

After re-reading that post from October 15th, it’s scary how many times over the years my client defections have signaled a change in the market. Maybe I should think about putting out a McKeever defection indicator and see if it takes off. And if you don’t know by now, I’m a big fan of anecdotal evidence.

In conclusion

Like everyone else, I don’t like to turn on the TV and see all the red numbers flashing across the screen, day after day. But in the end, I’m not overly concerned about this market.

Its SO important to keep things in perspective. If you have a well diversified portfolio, put in the context of a well laid foundation (code words for financial plan), it’s just market noise that we will navigate through once again…

Tags: financial advisor, investor psychology