Advisors need to warn clients that there may be another market downturn in the next few months depending on the progress that is made in controlling Covid-19, said Julia M. Carlson, founder and CEO of Financial Freedom Wealth Management Group, based in Newport, Ore.

“Markets look nine months out, and the market is already pricing in that a vaccine will be developed for Covid-19 by the end of the year and that there will not be a second wave of the pandemic in the fall,” noted Carlson, who was named by Forbes as one of American’s Top Women Advisors in 2019 and 2020.

“The market is predicting we will be back to business by the end of summer,” she said. Some areas of the country—like Oregon—are much further along in the return to normalcy than the urban hot spots. Carlson said she and her team members are back in the office already and she plans to have a face-to-face meeting with a prospective client next week.

The problem is that something could trigger another crash, although Carlson said that, even if one occurs, she did not think it would be as bad as that seen in March.

If things go wrong with controlling Covid-19, or the presidential election upsets the market, or some geopolitical event occurs, another drop of 10% to 15% could occur. “Clients need to be warned that could happen,” she said.

“Our clients are long-term investors and they need to know we will get through this” whether the optimistic view of world events unfolds or there is a negative turn to events, Carlson explained. “As scared as some clients were at the end of March, they are now feeling more optimistic.”

The path out of the market drop feels different this time than it did in 2008 and 2009. For one thing, the government poured money into the stimulus packages, which Carlson said many of her clients who are small business owners were able to take advantage of.

“When we asked in March where our clients thought the market would be at the end of the year, many said it would be down 10% to 20%. There was a shift by the end of April, and many clients were saying they thought the market would be neutral or up 5% by the end of the year. There is upward momentum now. This recovery looks like it will be quicker than after the Great Recession,” she said.