Good sign or not?

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Sep 29, 2008 6:15 pm

I have been talking to my "A" clients who generally are very optimistic with regards to the market.


This has really gotten to them for the first time through all of this.  They are really nervous now and it's tough to find the words to comfort them. 


Sep 29, 2008 7:14 pm

Snags this is a difficult time. Take a deep breath. The games's not over.

 
The market is going to do whatever it's going to do. THERE IS NOTHING YOU CAN DO ABOUT THAT. What you can do is stay in contact with your clients and keep them informed. That's something you can control. Tomorrow if they ask you what they should do tell them to watch Jepardy instead of U.S World Report. You think i'm kidding,. but i'm not. Tomorrow there is nothing to do about this. As it stands we don't know where the market is headed short term. You can't act without information. Listen carefully to your firm's position. Use that information to develope your own strategy. IF you've been a good advisor you are allocated across the markets. That will help, even though the downturn is broad spectrum.
 
We thought we were done in 87, and not even close. Then 89, then 91,94,98, 01-03. It's always the same thing, it's over. Well, I'm not down playing this thing. Tomorrow could be one ugly day, but i assure you it's not over. Your clients need you to be calm and in control.
 
To paraphrase Nick Murray "Everytime the market has gone down it has come back and gone higher." Snags, you gotta believe.
 
Now you can see that reading about it is a lot easier than living it.
Sep 29, 2008 7:32 pm

If it makes you feel better, we did have a few good clients come in and plop down some cash into small value and munis. 

I feel ya though Snags, even the seniors in my office are a little panicked when they are off the phones, but like BondGuy, they're reassuring people that 100% of the time the market has come back and gone higher.  We're telling them to get out the house and take a vacation. 

I remember some interview with a hedge fund manager, he said they didn't have any TVs in the offices, because they weren't interested in the day-to-day static. 

Sep 29, 2008 10:02 pm

Bond Guy, great posts today, as usual, your comments are invaluable.

This is a time when clients need our leadership. This is what they pay us for. Maybe you need to re look at some allocations, because its also a time when clients real tolerance for risk is clear. Make sure they are all allocated properly and then just hold their hands, and let them know the market is not going to zero. We are going to have some rough days in the immediate future, but i really believe we will come out of this much stronger than we were. On much more solid footing.
Clients with a 3-5 year time horizon should be reassured that they have the time to wait for this solid footing to take hold. Again, they need our leadership. Right now.

Sep 30, 2008 11:12 am

It was amusing, no, pathetic to watch the news last night and all you see is " Dow has it's biggest point decline of all time!"

 
In percentage terms, it wasn't even in the top 10. Did't see it put in that perspective one time.
 
It's up to us to provide perspective to our clients.
 
Stok
Sep 30, 2008 12:11 pm

Was '87 the worst? wasn't it a 10% drop? Wouldn't the DOW had to fall over 1000 pts to match that drop in the 80's?

Sep 30, 2008 12:13 pm
anabuhabkuss:

Was '87 the worst? wasn't it a 10% drop? Wouldn't the DOW had to fall over 1000 pts to match that drop in the 80's?

 
'87 was a 22% drop.  The Dow would have had to go down over 2200 points.
Sep 30, 2008 12:14 pm

Thanks

Sep 30, 2008 3:20 pm

Geez guys. There will be a tomorrow and the sun will rise and set. Understand a fundamental change has happened and now in to a period of readjustment. You need to refocus and look at the opportunities that will arrive at some point. Discuss strategy and directions with your clients. Discuss other products ie. Insurance Products that may be in need of a review.

What has happened is now part of Investing History ....learn form the experience and prepare yourself and your current and future clients for changes.
Sep 30, 2008 3:44 pm
gvf:

If it makes you feel better, we did have a few good clients come in and plop down some cash into small value and munis. 

I feel ya though Snags, even the seniors in my office are a little panicked when they are off the phones, but like BondGuy, they're reassuring people that 100% of the time the market has come back and gone higher.  We're telling them to get out the house and take a vacation. 

I remember some interview with a hedge fund manager, he said they didn't have any TVs in the offices, because they weren't interested in the day-to-day static. 

 
I can see where FAs don't need to be swayed by the day-to-day static of the news channels, but don't hedge fund managers rely on breaking news to determine what to buy and sell for the day?
 
Last time I checked, they don't exactly follow a buy and hold philosophy.