In my career as a financial advisor, I’ve made a few mistakes. The biggest? Not being more convincing to my clients that they should stay invested in rough markets.
I became a licensed financial advisor in early 2003. People were still really skittish over the bad market – even though it was improving. The news was still mostly bad and little provocation was needed to make people sell their investments again. It seemed to stay that way for the next few years.
Finally, around 2006 or 2007, I stopped hearing as much about the days “back in the bad market.” I suppose time began dimming some memories. And then, 2008 happened. This was an incredibly difficult year in the stock market but I did everything I could do to calm the nerves of my clients and friends. Some listened to me. Others went against my advice and sold all of their investments.
Most of these people locked in devastating losses by selling at the worst possible time. And most couldn’t afford it. If they would have just stayed invested, they would have most likely made up those losses and then some. Since then, I’ve often wondered if I could have done more to keep them invested?
Five Lessons I Learned from Market Declines
One thing’s for sure: I learned a few lessons from those down markets. In the next bear market I’ll be much more vocal in sharing the five things I learned from market declines.Continue Reading …