When “trees grow to the sky,” investors are confident in their ability to pick investments and dabble in alternatives. But when those trees begin to fall, and values plunge, it’s time to ask, “What would the titans of the financial services industry say today?”

After all, when Warren Buffett parks cash in U.S. Treasury bills, everyone pays attention.   

I asked my friend and colleague, Paul R. Samuelson, how he thought other legends of financial services would counsel advisors and their jittery clients today.

Paul’s father was Paul A. Samuelson, a Nobel laureate in economics, whose work inspired Vanguard founder Jack Bogle’s creation of the first index mutual fund available to the general public. The elder Samuelson also kept in touch with Buffett.

“Buy and hold, and don’t pay more in taxes than you need to,” Paul said of the advice his father and their contemporaries gave whenever anyone asked—as they often did. “Don’t try to time the market, and don’t panic when investments are down.”

Paul recalled that his father urged family members to invest early in Berkshire Hathaway, which bought and sold concentrated stock positions.

The investments were tax efficient—investment gains and income were treated differently as an insurance company—and his father was pleased not to receive dividends and to have bearer’s certificates, signed by Buffett, that didn’t require a custodian.

As proof of the time-tested mantra to “buy and hold,” Paul shared an experience of his own: A 401(k) he opened early in his career had a balance of $17,000 when he moved on to another job. That was more than 30 years ago. When he unearthed the account, it had grown to $700,000.

“Buy and hold works,” he said.

What should advisors tell clients who want to dump stocks?
“Many clients don’t have to lower their risk if they’re invested in diverse stocks and investment-grade bonds. Assure them of that,” Paul said, adding that “advisors might need to explain how unusual today’s circumstances are,” with both stock and bond prices depressed.

Paul said even clients close to retirement can “still hold a significant amount in stocks as long as they’re willing to work a little longer if things go badly.” And for clients who have 10 or more years until retirement, stay the course, Paul said.

“The advisor’s job is to help clients resist the temptation to put all their money under the bed. It’s a bad time to do it. The most important investment years are those when you have the most money to invest, which is in the later years of the accumulation phase.”

Isn’t this the year to do some tax harvesting?
Paul acknowledges he has mixed feelings about tax harvesting.

“It can be of short-term, limited use in lowering clients’ tax exposure and a way to make some lemonade from lemons in a portfolio,” Paul said. “But it’s still acknowledging that you bought some lemons.”

More importantly,  he said, tax harvesting isn’t nearly as effective in generating tax alpha over time as asset location or other tax-smart investment strategies.

How are younger investors—millennials and Gen Z members—faring?
Advisors, take note: “This is an opportunity to make the case to younger investors that picking stocks they think are great is a bad way to manage savings they’re going to want someday to buy a house, have a child and retire,” Paul said. “Repeat the lesson: investing in a diversified portfolio is the key to long-term success.”

He said younger investors with holdings concentrated in stocks and options may find themselves without many good choices right now. Tax harvesting, of course, may help somewhat. But many are seeing their options fizzle and realizing that finding a higher-paying job isn’t as easy as it was a year ago.

In all, young investors “might get serious and put some money with an advisor as opposed to just having fun with it,” Paul said.

Paul empathizes with advisors whose clients can’t stop checking their mobile apps for market news and account values daily or hourly, only feeding investors’ anxiety—and making them more prone to rash moves.

Many advisors have clients who are coming up to retirement. What can advisors tell them? 
Be clear and firm, even if the advice is hard for clients to swallow: Keep working.

“Inflation is eating away at their savings, and their portfolio values may be down 10% or 15%,” Paul said. “Working has benefits. You can contribute more to retirement funds and get employer contributions, too.

“Working longer also reduces the number of years you expect your retirement savings to cover and helps balance the effects inflation has had in the past year in eroding your savings.”

Any final words?
The index funds that Bogle pioneered were, for a long time, the investment that provided long-term investors the best returns at the lowest cost, Paul said. And they are simple, convenient and practical.

Today there are more options—like exchange-traded funds (ETFs)—that can get investors similar exposure to the overall market with greater convenience than mutual funds—making the value of financial advice even higher.

Advisors earn their fees and referrals when they create financial plans that suit investors’ risk tolerance and timelines, implement those plans and then meet with their clients regularly. That’s never been as important as it is today.

Jack Sharry is co-chair of MMI's Digital Advice Community, a member of the Next Chapter Executive Leadership Advisory Board and co-chair of Next Chapter Leadership in Action. He hosts the WealthTech on Deck podcast, is the author of the book Authentic and Ethical Persuasion, and is executive vice president of LifeYield.