Advisors and investors aren’t likely to see eye-to-eye now that markets are down. Financial professionals and investors have defined risk in different ways. Investors define risk as losing wealth; advisors define risk for investors as not meeting their personal goals. This difference in world view makes sense, since advisors spent much time identifying client goals, needs and risk tolerance. Investors, in contrast, focus on the bottom line in their portfolios. This is likely to be a point of contention in advisor-client meetings if declines continue in the current market.

As advisors and investors work together to navigate today’s volatile markets, it’s critical that they bear in mind that long-term investors are best served by avoiding panicky decisions, especially those that take investors out of the markets entirely. Below are five thoughts advisors and investors should bear in mind:

• Look ahead: Don’t mourn past decisions, especially those that came out of the blue sky, and don’t be frozen by regret going forward.

• Stay the course: Recognize that volatility might be here for a while to come, since some in the markets have been looking for a reason to buy (or sell).

• Focus on long-term goals: Don’t make snap decisions or panic; most losses come from impulsive decisions, later regretted.

• Use the right lens for decisions: Look at your portfolio in terms of your goals – for example, if your goal is income, remember that some companies may be forced to reduce dividends, so evaluate your holdings accordingly.

• Remember that time is on your side: Time, not timing, is what long-term investors need to consider. Few can time the market and buy or sell at exactly the right time; but everyone can stay invested and realize gains over time or, at the least, get back into the markets sooner.

The coronavirus market crisis, with its sudden, sharp decline, volatility and uncertainty, is enough to unnerve even the savviest investor. However, if they remain calm, long-term investors can afford the patience to ride out today’s volatility and achieve their financial goals.

Dave Goodsell is executive director of the Natixis Center for Investor Insight, a research program dedicated to the analysis and reporting of issues and trends important to investors, their financial professionals, money managers, employers, governments and policymakers.

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