13 June

This is Your Advisor’s Biggest Job During Scary Markets.

by Grant Maddigan 0 Comments

https://www.youtube.com/watch?v=VKKMnhsi1Ts

I want to talk to you about bad markets, and why it is critical to talk to your advisor during these types of markets.

We can guarantee that another bad market will come again, eventually, sometime. And when it does, you will want to have a plan. That is precisely why now is such a good time to be talking to your financial advisor.

Preventing clients from bailing out of a well-designed investment plan during a scary market is probably THE single most important job a financial advisor can carry out. When investors move out of the market when markets are down, they can really harm their long-term financial plans.

A recent study, released by Fidelity Investments, shows how damaging moving in and out of the market can be. If an investor invested $10,000 back on Jan 1st, 1980, just missing the 5 best days in the market would cost that investor 35% of their overall growth. Missing the best 50 days cost them 91% of the growth they would have received by staying in the market.

When the markets get scary, advisors are often the only people that can keep clients from doing something to hurt themselves, financially, over the long term. Sometimes advisors tend to avoid clients when the markets are down. And that is a natural human tendency. We do not want to deal with uncomfortable conversations if we can avoid them.

However, if clients are not in touch with their advisors during these rocky markets, clients will oftentimes decide to “cash out” of the market. By moving out of the market, clients can really hurt the growth on their plans.

The Value of an Advisor

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Instead, focus on time in the market – not trying to time the market

It can be tempting to try to sell out of stocks to avoid downturns, but it’s hard to time it right.
If you sell and are still on the sidelines during a recovery, it can be difficult to catch up. Missing even a few of the best days in the market can significantly undermine your performance.

I have spoken with all my clients directly over the past several months and advised them accordingly. When did you last hear from your advisor?

Yours in service,

Grant Maddigan, BBA, CFP®
Certified Financial Planner®

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Grant Maddigan

Grant is a Certified Financial Planner with Freedom 55 Financial and has worked with Evolution Wealth Management since 2018. He attended Memorial University and graduated with a Bachelor of Business Administration degree. He began his financial services career in 2015 when he joined London Life Insurance Company and is now entering his fifth year of practice. Grant takes pride in helping his clients reach their financial goals. A firm believer in education, Grant completed the globally recognized Certified Financial Planner (CFP ® ) designation in 2019 which made him one of the youngest advisors with this designation in the province of Newfoundland and Labrador. He is currently working toward the designation of Chartered Life Underwriter (CLU) in order to support clients with wealth and estate planning. Grant is licensed to sell mutual funds, life insurance, and health insurance in the province of Newfoundland and Labrador.