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Tips for Talking to Clients About Market Volatility

If you’re reading this, we’re guessing it’s not your first time experiencing market volatility. There are advisors out there that lived through 2008 and the pandemic market plunge of 2020 and still have some of their hair left. This time, even the new kid on the block, cryptocurrency, is also feeling the pain of people pulling out of the market and putting their assets in other more conservative investments that seem safer.

Of course, all investments come with risk. The one specific thing in the market that guarantees there will always be market volatility as long as there is a market is people. Its people who make the markets move and have been the cause of every single crash, boom, and every movement in between.

As we watch the market slowly bleed at the beginning of 2022, wondering whether we will see an inflation-fueled nose-dive or hampered growth based on some new, potential war, it’s important to keep in mind one thing: the market will recover.


How to Talk to Clients About Volatility


It’s important as you talk to clients who may feel panic or overwhelm at the market movement each day to keep the facts in mind. While meeting them where they are at emotionally is critical, too, having the facts in mind can help you keep a cool head as you respond to their concerns. They trust your financial advice, it’s why they come to you, so trust your approach, too. After you’ve addressed their feelings and ensure they feel heard, keep the following top-of-mind as you discuss their concerns and options.


  1. Even if you think that a correction is necessary due to federal money printers having a field day or over eager stock buybacks propping up the market, averaged over time, the market still only heads in one direction: up. Showing your clients a longer-tail view of the market trends and seeing the arrow going up and up over time can help assuage initial fears of a total market decimation.
  2. Market growth, over the long-term, has been fueled not by the next revolution of space-aged tech, real-estate expansion, or other market factors, but by the simple fact that the world is becoming a better place and more people have access to more goods, education, and better standards of living. The global poverty rate has plummeted in the last 20 years alone, and while there has been a significant setback due to the pandemic, we’re still lightyears ahead of where we were four or five decades ago.
  3. Over time, medical and communication advancements means that more people can participate in the global market, which pushes market trends in a favorable direction. As more people enter the market with better information, the current dip will correct itself.

While you may not look forward to talking to clients about the downturn or wince every time you hear more bad news about the markets, remember that keeping them calm and level-headed about their investment moves is critical for helping them achieve long-term wealth. Your approach to showing your clients how volatility starts and how it corrects is the piece they need in order to prevent making a bad situation worse by making rash decisions during a normal downturn.

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