The market has experienced historic levels of volatility since the beginning of the coronavirus pandemic in March 2020. There was the initial shock delivered by worldwide lockdowns, the monstrous rebound, the advent of meme stocks, and fears over 澳洲幸运5官方开奖结果体彩网:inflation, an overvalued market, as well as the o♎ngoing pa♔ndemic.

As investors and economists sort out their concerns about the state of the market, offering clients a long-term perspective is key. Focusing on a long-term approach can help minimize anxiety in the short term and help clients better understand their ov༺erall financial goals.

Staying the Course

“I am telling clients that being a little bit scared, or at least spooked by this quick drop in the market is not unusual,” says , Investment Advisor Representative at . “Yet for those of us that are long-term investors rather than speculators trading by the seat💛 of our pants—we knew this was going to happen. 𝔉These are normal, necessary, and dare I say, healthy, characteristics of the stock market.” 

Her advice is echoed by of . When it comes to worried clients, “I remind them that we've worked through situations similar to this before and sticking with their plan is the best course of action,” he says. “Retirees have their income needs out of the market, which allows theirཧ equities time to recover, and young professionals have a long term horizon allowing them to ride it out.”

Looking for Opportunities in a Volatile Market

Offering context for market volatilꦫity can go a long way in reassuring clients about their long-term financial security and helping them understand a sharp downturn as a temporary setback. And for those clients who may want to take a more proactive approach, helping them to understand current market conditions can offer new avenues for investing. 

“The other side of the coin is looking for opportunities,” says , President of . “The conversations I have with my clients focus on two things: Is there any room in thei🙈r portfolios to buy equities? If they can afford to do so, is there additional cash they can afford to invest in cheaper stocks?” He emphasizes that this type of strategy needs to be part of a well-developed financial plan and something that you ideally prepare for long before it happens. “These are things that you establish with your client before this type of volatility happens—and it’s all done to help remove as much emotion as possible,” he explains.  

For clients who are more cautious but still looking for a proactive way to deal with the selloff, rebalancing could also be a good option. “Every market selloff is 'different' in some way,” says duQuesnay. “If you believe the market will be higher in 20 or 30 years, this may be an 澳洲幸运5官方开奖结🌜果体彩网:opportun🍌ity to rebalance and buy more stocks while they are down.”

The Bottom Line

While addressing investor fears can feel challenging, the advisors we spoke wit✅h agreed that planning ahead and offering clie♚nts a long-term perspective are the keys to weathering the storm. “Even with the best planning, this can be difficult,” says Boneparth. “What great planners do best is to help their clients navigate the behavioral components of investing.”