“But we are advising clients to look for opportunities to buy as the market is in fluctuation,” Montagne says. “We are also encouraging advisors to communicate with clients. Clients are looking for income and long-term growth; this is no time to change their priorities and panic.”
Gradient Investments, which has $850 million in AUM, anticipated this year would be a flat market. “We thought the market was pretty fairly valued since the first of the year," Montagne says. "Even in up years, you get corrections like this, so this is not showing the markets are collapsing.”
Hensley, too, has started to receive nervous inquiries about the market’s health — but not from clients.
“I have however gotten questions from friends and family worried about the volatility,” Hensley says. “I have always said that if your grandmother or uncle starts asking you about something, pay attention, because that means everybody is concerned.”
If anything, Smith, at STA Wealth Management, was surprised by the calm on Monday.
“Even our high-strung clients seem more calm than usual,” Smith says. “I’ve had a huge swell of communications, but they want to know what we’re going to do next, what our plans are.”
That calm may be the result of wise risk management. Ahead of the downturn, Smith had already prepared STA’s portfolios.
“We’ve been de-risking since March,” Smith says. “Right now, we’re around 25 percent cash, we’ve found some asset classes with low-or-no correlation to the market.”
At Capital Wealth Planning, portfolio manager Kevin Simpson reports taking similar measures.
“Because we run our portfolios on a strict risk-measured allocation where risk is kept within a defined range, we expect to use any panic as an opportunity to actually add to our equity holdings,” Simpson writes. “Last Monday, we did the opposite and added to our hedged position in advance of the landslide.”