More advisors offer advice for keeping cool in a market storm
It was a busy Monday for financial advisors, many of whom were forced to spend hours on end talking clients down from proverbial ledges as the stock selloff gained steam.
Yesterday InvestmentNews caught up with a number of wealth managers in between those client calls to learn their secrets for dealing with anxious investors. Once the market closed – down 3 percent on the S&P 500 – we heard from even more advisors about their strategies for keeping their heads when seemingly everybody around them is losing theirs.
Kelly Milligan, managing partner at Quorum Private Wealth part of Sanctuary Wealth, for example, says on days like yesterday she reminds clients that their strategy to achieve their financial goals hasn’t changed. To allay their fears, he shows them the math in real time.
“Volatility in markets in inevitable, normal, and usually healthy,” said Milligan. “The time to prepare for volatility is not the day that it happens. It’s months and years in advance and starts with a discussion about risk tolerance and the power of diversification.”
Elsewhere, Coleman Benko, certified financial planner at Benko Financial Services, says the most effective method for calming our anxious clients is two-fold.
“First, we set realistic expectations for market volatility and downside risk inside the portfolio. We talk about computer-aided trading and technology has increased the speed of trading and volume of trading, resulting in faster whipsaw moves in the markets,” said Benko. “Secondly, we implement downside hedging strategies to help our clients have a smoother ride and finite downside protection in certain instances.”
Brent Chappell, founder of Chappell Wealth Management a partner firm of Sanctuary Wealth, says he uses
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