The Independent Market Observer

Talking to (Worried) Clients on the Road

Posted by Brad McMillan, CFA®, CFP®

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

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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.

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