3 Analogies on Long-Term Investing to Use with Clients
Today, I’d like to talk about the long term. You know that I like visuals; I like props; I like things that talk in mom-and-dad language. So I’ll share three analogies you can use with prospects and clients to help them commit to the long-term nature of investing.
Watch the video or read the transcript below to learn these three analogies.
This is a very simple but very effective approach to establishing a long-term plan, right from the beginning.
When you have a new account coming in, get the person’s date of birth, get the person’s date of high school graduation, get the person’s wedding date, if they’re married. Get the closing Dow Jones Industrial Average of all three days, and show those closing prices. “See what the Dow has done since the day you were born… We’re starting off here on a long-term plan.”
Another advisor of mine had a client that grew strawberry plants. She was checking the prices every day and bothering him. He said, “Margaret, if I recall, you told me you grow strawberry plants. Is that correct?” She said “yes, I do”.
He said, “Margaret, how would your plants do if you pulled them up every day to check the roots? They wouldn’t grow. Well your investment’s not going to grow either, if you pull it up to check the roots every single day.”
Here’s another good long-term analogy – a driving analogy. Let’s say we’re going to drive from San Francisco to New York. We’re going to drive cross country – what a great adventure! But the first 30 miles are going to require us to drive through construction. Are you going to turn back? No, you’re going to be patient and get through it. In fact from San Francisco to New York there’s probably going to be several patches of construction. We’re going to get through them though and most of the ride’s going to be easy going. In the end we’re going to get where we want to go.
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