Who’s Returning Your Calls?

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Published by Robert W. Huntley, CFP®, CHFC®, CKA® Founder & Wealth Advisor

When markets are selling off, is anyone returning your calls or emails?

It’s February 28, 2020. The US stock market is in the midst of another correction, currently off about 12% in just one week. 

Will it get worse? Will it turn around quickly? 

No one knows. 

And that’s the trouble with these things. It’s not possible to predict what the general markets will do at any given time. 

Rule #1 For Investment Clients and Your Advisor

Your advisor should be available. Period.

If they’re not responding to your phone call or email about your portfolio in this current market, then they’re failing at rule #1.

Be available when things get scary.

We work all year long to educate clients about our views on the markets, their portfolio, and their overall financial plan.

When markets get scary, we ramp up the discussions on these things because we know what it feels like to watch the market falling and see increasingly bad headlines all over the media.

It can be unsettling, to say the least.

I have lived through several big market events so I know just how unsettling it can be.

  • In 1987 I’d been in the business for about 3 years when we saw the biggest single-day sell-off in history. The DOW was off about 22% in one day! Yet for the year, the market had an overall gain.
  • In 2001/02and again in 2008/09, we experienced market corrections of about 50% from top to bottom. Each time was followed by strong gains, but no one knew at the time where the bottom would be. It was scary. 2009 was particularly strange because the first quarter saw a continued sell-off of about 20% following the terrible 2008 market sell-off. But by the end of the year in 2009, the broad US market was up net more than 25%. No one was expecting that year’s result in March of 2009.
  • In 2018, the fourth quarter saw a 20% market correction, only to be followed in 2019 by record gains.

So, what will the story be for this latest correction in 2020? We don’t know yet. However, if you have a well thought out game plan and your portfolio is designed to protect you as much as you need to be protected, then you are on solid footing.

But even with a plan and well-designed portfolio, you still need to talk with your advisor sometimes to be reminded of why you should stay positive.

What’s a reasonable expectation for an advisor?

It’s a reasonable expectation for any investor to be able to reach their advisor the same day if you have questions and concerns.

We hear stories regularly about just the opposite. In fact, many of our new clients are making a change for just that reason. They can’t seem to get their current advisor to respond.

That’s irritating when markets are doing well, but it is unacceptable when markets are selling off. That’s when you need advice and guidance more than ever.

Rule #2 For Investment Clients and Their Advisor

The second rule to successful investing is to build your portfolio in coordination with a well thought out, custom financial game plan. This plan should give you the appropriate amount of portfolio risk to begin with and an understanding that when, not if these market corrections happen, you can reasonably ignore them and just stick to your plan.

Think about it for a minute…

If you have a plan and you know you have plenty of cash reserves and liquidity for 2-3 years if necessary, plus you have a portfolio that has your risk budget fine-tuned so your potential short term market losses are within your threshold for pain, you can remember your plan was designed to handle this sort of market event. So, you can go on about your business and react less emotionally to the headlines

Without a well thought out plan, to begin with, this is harder to do.

You end up much more likely to react to current events and make decisions that seem unwise in hindsight.

Here’s the truth.

It is wise to have someone help you create both a thoughtful overall financial game plan and a thoughtful portfolio designed to make your game plan work.

But maybe that isn’t your experience. Maybe you just have accounts that have been sitting for years without much or any advice.

Maybe you purchased some investments years ago from a broker and never really get any sort of ongoing advice to support you.

Even if this is your situation, the very least you should expect is to be able to get your advisor on the phone to discuss your situation.

Are you able to get them to return your phone call or emails?

If not, then you should consider talking with someone else.

I decided to write this blog and just cut to the chase so our clients could share it with any of their friends who maybe aren’t getting the advice and support they should be getting.

If that’s you, please feel free to contact us, no strings attached. We will discuss where you are at and what sort of changes might be appropriate given your situation.

Money doesn’t have to be complicated. You just need the right people to help you make the right decisions. Anyone can make better financial decisions with the right advice.

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