As life returns to normal, we are starting to meet up with friends again. The masking restrictions are relaxing. Restaurants are returning to full capacity. If you aren’t gathering with friends soon, it’s not too far off. It’s time to get ready for the common questions people ask in social situations.
How’s The Market?
As an advisor, you do many things to help people. Your friends likely associate you with the stock market. The question they often greet you with is often “How’s the market?” It sounds so simple.
There could be several underling messages:
• They really want to know. This is your most hoped for outcome. They want numbers and probably a reason behind today’s movement.
• Misery loves company. For whatever reason, their investments aren’t doing well. They want to hear it’s difficult and no one is making any money.
• Opportunity. Some people are in the market for the long term. Day traders are at the other extreme. They are wondering what’s hot. Is there money to be made? Am I missing something? The message to convey is straightforward: “I’m a professional. I know what I’m doing. I pay attention. Here’s your answer.” The message to avoid is also obvious: “I don’t know and I don’t care. I only recommend managed money to my clients.” You’ve heard people say that! It implies they don’t care if their client makes money or loses money.
Six Possible Answers
The question seems straightforward. You might assume the answer is “The Dow is up (or down) X points today.” Modifying your approach can get them interested in continuing the conversation.
1. Daily and YTD numbers. This builds on the logical answer. “On Friday (6/18/21) the DJIA closed down 533 points at 33,290. Put another way, the index is up 8.8% from the start of the year.
Rationale: Points up or down doesn’t tell you much. YTD performance puts it into perspective.
2. What’s moving the market? This might be more important when the market makes big moves. Investors wonder why this sharp move happened. You have checked the sector movement within the S&P and most active stocks. You can explain the market is down because of weakness in (this sector) and (that sector.) You mention companies that might have reported disappointing earnings.
Rationale: You’ve followed up what the market is doing with why. This should impress people.
3. The index is made of sectors. People follow the S&P 500. They often don’t realize it’s composed of 11 sectors, each with different YTD performance. You know this, because it influences your recommendations. You mention the S&P 500 is up about 13% (6/18/21) for the year. You follow with “It’s been fortunate for my clients who went into the Energy Sector early in January. That sector is up about 36% YTD. Some people are thinking of taking profits now.”
Rationale: People seeking free information might learn when to get in, but it helps to have a professional call you up and suggest when to lighten your position.
4. Investors market. This can be good when the market isn’t going up in a straight line or is trading flat. “It’s very exciting. It’s an investors market, not an index market. That’s where we add value…”
Rationale: You are highlighting advice has value.