He came to us in 2002 when markets had been rough and 9/11 was still fresh in our consciousness. He looked at the futures on the TV in the morning, checked on the markets at lunch and watched more when he got home and over dinner.
His portfolio wasn’t bad, but we improved it. That was the easy part. After all, he had the basics down pretty well. He knew to keep a long-term view, he just had trouble actually doing that.
The harder task was coaching him to find a better way to interact with news. He wanted to be informed and that is a good thing. He was very worried the markets would tank if we sent troops into Iraq. When the troops were sent in, the market reacted by going up. He was able to recall several other times he was wrong and several times he was right about the market’s direction.
The turning point came when I asked him if he remembers feeling as anxious at those other times as he did this last time around.
“I’m not clear which ones were the most tense but yes, I was tense each time,” he told me.
That led to a conversation about the source of the tension and the things that fed it. News was the number one contributor. From there, we explored alternative ways to stay informed. Eventually, he chose to eschew almost all cable news. The antics of many on the tube in the wake of Lehman Brothers sealed the deal.
He was anxious through that time (who wasn’t) and I like to think my relative calmness helped him out, but the outrageous and inflammatory statements by so many struck him differently. Instead of something he needed to make decisions, the news looked like a source of stress. He was now laughing at the folly of making decisions about your personal finances based on the news. He has sailed through all the other “crises” like the downgrade of the country’s credit rating, the fiscal cliff, Greece, Cyprus banking, the tsunami in Japan and Russia’s activities in Georgia.
Some clients watch a lot of cable news and that’s fine as long as they don’t change their portfolios based on what they watch.
If a news outlet gets you uptight, don’t consume your news from it. It’s that simple, but it’s not that easy for many. You can help.
Financial planners love to get people to focus on what they can control. With enough coaching, clients can control how they consume news and what they do with it. This tale of two telephone calls in the wake of the Brexit vote is just the latest example. If you blow this chance, don’t fret too much. Another chance will come along soon enough.
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. Moisand practices in Melbourne, Fla. You can reach him at www.moisandfitzgerald.com.