The U.S. stock markets have traded at all-time highs this summer. For that reason alone, investment advisors should be in good spirits. But the majority of advisors I communicate with are as nervous right now as I can ever remember.
Through my work with the “No More Pies” seminar over the last four years, I participate in an ongoing dialogue with over 400 investment advisors from all around the U.S. and Canada.
Deep down, investment advisors know that all they have had to do for their clients for the last several years was to be invested in the stock market. It has not mattered what clients owned; everything in the stock market has gone up.
Like normal people, investment advisors want and need to be liked and appreciated. They also need to feel that they manage their client accounts using the most widely accepted investment management strategies. The buy-and-hold investment management strategy has worked well for individual stock market clients because the stock markets have been going up.
There is nothing better as an investment advisor than to make your clients money. Everyone is happy and everyone thinks that you are the greatest.
In the stock market, as in life, nothing lasts forever. Stock market losses are brutal. No amount of consolation can help a stock market investor get their money back.
Stock market gains are great. But it is what you keep of your stock market gains that really matters.
Your investment advisor needs to articulate to you a stock market risk management game plan right now. You need to know exactly what steps are going to be taken not if, but when, the next great stock market decline takes place.
The majority of investment advisors have no game plan for the early stages of the next great stock market decline. I can make that statement because I know more investment advisors than anyone who is reading this blog post.
The stock market risk levels are extremely high now. And so are the investment risks to individual stock market investors. Make sure that you are not in the group of investment advisors and individual investors who follow each other over the stock market cliff again.
Ric Lager
Lager & Company, Inc.
