In the midst of some crazy market volatility and worldwide stocks plunging further amid doubts about China, investors are reaching out to their financial advisors for some reassurance.
CNBC contacted members of our Financial Advisor Council and we found their clients are asking questions such as: Should we invest more in stocks, now that the market has come down? Will there be bargains? What will we buy? Will the stock market crash?
In response, the advisors are providing their investing insights and letting their clients know what they are doing to take on these events. They are reassuring clients and the message is to “Keep calm and carry on.”
Barry Glassman, a certified financial planner and president of Glassman Wealth, took a proactive approach by reaching out to clients before the calls started coming in.
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“We all need to keep in mind that this kind of correction is normal and expected,” Glassman said. “As we mentioned in an email to clients last month, we need to prepare ourselves that sometime in the next 18 months, we are likely going to experience a 10 percent correction.
“No one knows if this is the end or just the start of a periodic downturn,” he added. Glassman told his clients to keep a few things in mind as the news continues to roll in about the market’s volatility.
Diahann Lassus, CFP and president of Lassus Wherley, said her clients are asking her what is actually driving all this market volatility and the fast sell-off.
“My top piece of advice is to take a deep breath and stop watching the markets too closely,” she said. “If they are long-term investors, this short-term volatility is just that —a short-term issue.
“They should avoiding selling into this volatility unless they absolutely need dollars.”
The reality is that the markets have had a very good run and savvy investors know that, sooner or later, they will experience a correction or some level of down market, Lassus explained. “It is only a matter of time before this all changes,” she said.
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Manisha Thakor, director of wealth strategies for women at Buckingham & the BAM Alliance, said she always talks to clients to prepare for such volatility.
“That said, we are all human and when these big downs come, clients need reassurance,” she said.
Some of her clients are reaching out saying, “I know we planned for this, but now that it’s here, I’m feeling scared.”
“I explain how the money that they have in stocks is, by definition, money they don’t need to spend in the near term.”
Thakor said she is reassuring those clients by running through the asset allocation and diversification plan that was created for them.
“I explain how the money that they have in stocks is, by definition, money they don’t need to spend in the near term,” she said. “If they needed to spend it near-term, we would never have put it in stocks to begin with; it would have been allocated to high- quality fixed income.”
—By Jim Pavia, Senior Editor at Large