August 17, 2020 / by Don Connelly / Investing Wisdom / 0 comments
Unquestionably, the stock market has experienced extreme volatility in the last couple of years, elevating the anxiety levels of investors who grew complacent throughout a historic 11-year bull market. Just as they did throughout the wild gyrations of the 2008-2011 market, investors have grown intolerant of the recent, wild stock market gyrations, resulting in many choosing to make wholesale changes to their portfolio, switch financial advisors, or flee the market entirely.
But, what investors may not understand is that switching between asset classes to avoid volatility can actually have the opposite effect. It is incumbent upon financial advisors to help their clients understand that, with a sound investment strategy and a long-term perspective, volatility can actually be good for a stock portfolio because it has always been the primary force that drives market gains over time.
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Financial Advisor Do’s and Don’ts During Extreme Market Volatility
June 27, 2022 / by Don Connelly / Investing Wisdom / 0 comments
Financial advisors play a vital role in helping clients achieve their most important financial goals. But where they really earn their fees is during times like these, when helping clients navigate the choppy waters of extreme market volatility. Clients look to their advisors to guide them through scary times and reassure them that everything will be okay.
Emotions run high when the market turns volatile. When stressed, humans instinctively want to do something and take some kind of action to reduce or eliminate the threat. That’s when mistakes typically occur. The value of a financial advisor rises in direct proportion to the anxiety levels of their clients, who look at volatile market swings as a threat to their financial security. The critical role of financial advisors is to keep their clients from making costly behavioral mistakes. During periods of extreme market volatility, there are some things advisors must do and things they should avoid doing to maximize their value to their clients. Here are a few.
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How to Assure Clients That Volatility Is Part of the Strategy
August 17, 2020 / by Don Connelly / Investing Wisdom / 0 comments
Unquestionably, the stock market has experienced extreme volatility in the last couple of years, elevating the anxiety levels of investors who grew complacent throughout a historic 11-year bull market. Just as they did throughout the wild gyrations of the 2008-2011 market, investors have grown intolerant of the recent, wild stock market gyrations, resulting in many choosing to make wholesale changes to their portfolio, switch financial advisors, or flee the market entirely.
But, what investors may not understand is that switching between asset classes to avoid volatility can actually have the opposite effect. It is incumbent upon financial advisors to help their clients understand that, with a sound investment strategy and a long-term perspective, volatility can actually be good for a stock portfolio because it has always been the primary force that drives market gains over time.
Read more