Back in late February of 2009, I got an email from a client about an “adjustment” with this sentence in it: “I know none of us can predict the future but depression or not, the stocks will continue to go down in the next few months.” (emphasis added) Classic. He says no one can predict, then he makes a short-term prediction as though it were a sure thing.
As I write this, the S&P 500 is flirting with the traditional bear market threshold of down 20 percent. If the market continues down another 20 percent, mainstream media will cover the markets a lot more and not in a positive way. This will induce some otherwise calm clients to worry and some may get uncomfortable enough that they may forget the tenets of prudent investing. They’ll do much better if you can guide them back to prudence.
Dan Moisand, CFP, has been featured as one of America’s top independent financial advisors by Financial Planning, Financial Advisor, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager and Worth magazines. He practices in Melbourne, Fla. You can reach him at [email protected].