As U.S. Economy Teeters On The Edge Of Recession And Stock Prices Indicate A Downturn Will Be Averted, Advisors Must Put It In Perspective For Clients Hot

0.0 (0)
Write Review

The Institute of Supply Management on August 1 reported that its manufacturing index slipped below 50% for the second time in two months following 34 consecutive months above 50 heightening fears of a recession. Yet the stock market, a leading economic indicator, is behaving like the economy will snap out of its malaise. What do you do?

If predicting the next turn of the stock market is not your thing, the best you can do is to put this unusual pre-election period in perspective for your clients. Your experience and judgment matter to clients.
Take a look at picture below.
What do you see? What’s that a picture of?
Please post comment now with your answer. (Don’t cheat!)
When you’re done reading this post, click here to find out the answer.
The point of this exercise is to highlight what you bring to clients: Perspective. That's valuable.
Investors looking at today’s investment and economic news have little perspective. They cannot make sense of what they’re seeing.
With the global financial system nearly collapsing four years, Wall Street totally discredited, and do-it-yourself Web-based wealth management applications on the rise, investors are more confused than ever, and advisors arguably face the most difficult business environment ever.
You can pretend you know whether stocks, bonds, or asset classes are about to go up or down, but you probably know that is a dangerous game. Instead you can provide perspective. You can tell clients what you see.
You have a trained eye. You have studied the history of investing and you have experienced up and down markets.
Investors need you now. This is an opportunity for you to give your perspective.
Investors using asset allocation advice from a discount broker or self-directed Web-based applications don’t have your guidance. Investors with an advisor who is not communicating with them or who lacks the educational and professional credentials that you possess need to hear from you now.
What you believe investors should be doing right now may not be sexy. It may sound like the same old message. That does not make it wrong. In fact, it makes it more important than ever that you tell people your views.
As a professional, you have an important perspective on what’s happening right now in the economy. If you are relying on Modern Portfolio Theory and ascribe to a long-term buy-and-hold investment approach dependent on diversification and rebalancing, you must communicate your perspective to clients now.
Sure, your approach does not change much. But the world does change. So you must address this issue over and over again with your clients if you hope to be successful and enforce a discipline.
Give people your perspective and that will differentiate you. The Web based apps don't give them answers and do not help them address behavioiral finance issues. The uncertainty investors are facing as the election nears and the economy drifts presents an opportunity.
Write notes to clients, blog posts for prospective investors, make videos, speak at the local library, and do whatever else is necessary to make your perspective known.   
And if you need help with keeping your perspective, please join us for Fritz Meyer's economic analysis at a free webinar today at 4 ET.


This Website Is For Financial Professionals Only

User reviews and Comments

There are no user reviews/comments for this listing.
Already have an account? or Create an account