Talking to (Worried) Clients on the Road

Posted by Brad McMillan, CFA, CAIA, MAI

Find me on:

This entry was posted on Sep 20, 2018 2:59:29 PM

and tagged Commentary

Leave a comment

worried clientsI am sitting in an airport writing this after a speaking trip—and running behind schedule—so this will be a short post. First, thanks to everyone who wrote in to congratulate me on my book, Crash-Test Investing. It is much appreciated. Second, thanks even more to those of you who bought the book—especially Mom and Dad! It is a great start to the publishing adventure.

Should we be worried?

Over the past couple of days, I have had a chance to speak with a couple of different client groups. My theme, as usual, is worry. This is what I do, every day, and what many investors do as well. The real content of the talk, though, is not so much worry itself. Rather, it is how to worry effectively. I then outline the methodology we use here in the monthly economic risk factor and market risk updates, what we do and why, and why we shouldn’t be worried right now. It seems to be well received.

But when talking to clients after my presentation, I found that people are still worried. In many cases, they are very worried. Going back to Crash-Test Investing, after talking to these people I am even more convinced that the book explores some valid issues that older investors, and anyone who fears a significant decline, should consider. One woman, in particular, asked me directly what she should do if she feared another crash, despite the current robust conditions. She is asking the right question.

Effective worrying

As I've noted, I don’t believe a market crash is coming anytime soon. Indeed, I expect the market to continue trending up for a while, although the risks are rising. But I also believe investors should be thinking about what to do before conditions change. Talking with these worried people just reinforced the need to worry—but to do so effectively. The time to fix the roof is before it rains, not when the downpour starts. If the book does nothing else, I hope it encourages readers to start thinking and planning ahead of time, and to do so effectively. Failure to plan is planning to fail.

Investing, although in many ways abstract, is really the story of how people can plan and build successful lives. What I do, and what all investors do, is build for the future. We need to ensure that we have a future that can ride out the inevitable shocks, as well as one we can enjoy in the good times.

A timeless message

As always, though, what drives our actions should be the data. Right now, the data is good. We should acknowledge that and not worry. When the data changes, we won’t need to worry either, if we have thought things through and have a plan of action.

Worry, but worry effectively, and then take thoughtful action. This is a timeless message no matter how it is delivered.

Upcoming Appearances

Are you attending the 2019 FPA Annual Conference in Minneapolis, Minnesota? Be sure to join my “Economic and Market Update” during the Educational Breakout Sessions on Friday, October 18, from 7:45 A.M. to 8:45 A.M. CT. To learn more, visit https://fpaannual.org/.

Subscribe via E-mail

New call-to-action
Crash-Test Investing
Commonwealth Independent Advisor

Hot Topics

Have a Question?

New Call-to-action

Conversations

Archives

see all

Subscribe

Disclosure

The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly into an index.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.  

Third party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.

Member FINRASIPC

Please review our Terms of Use

Commonwealth Financial Network®