Every day, we, as a society, are inundated with a constant stream of information, news, and opinions coming at us from all directions—it’s on our televisions, smartphones, computers, social media feeds, email, text messages, browsers, etc. The volume and velocity of messages that reach us can make it difficult for any one message to break through the clutter and catch our eye in this era of information overload. So how, then, can financial advisors capture clients’ attention and influence action?
Bill McManus Mon Oct 12 16:45:00 EDT 2015
The market is volatile. Plain and simple. It has highs, and it has lows. It corrects, it plummets, it crashes, it rises. No matter how you dice it, the one thing you can always count on with the market is that it cannot be predicted. The problem is, however, that emotional investment decisions based on how the market is reacting today does not necessarily do us any favors for our future, as much as we may think we are doing the right thing by going for avoidance over endurance.
August 2015 was the worst showing for the S&P 500 and the Dow Jones Industrial Average in years, both dipping more than 6% (as of August 2015).1 That sounds bad, I know. But the consequences for making impulsive decisions born out of fear can have negative effects on our long-term investment success. We’re constantly talking about how volatility is ever-present in investing and offering guidance on how to assuage clients’ concerns during market corrections. But I thought that maybe investors need to hear it from someone else, someone bigger. I decided to start looking at market volatility through the eyes of historical greats. What would Honest Abe do?