Financial Advisor Problems

posted in: Charts | 0

This is a conversation (or something very similar) that many financial advisors are having this morning:

 

Client: Hey I just saw that the Dow and S&P are making new all-time highs, why am I not fully invested in stocks?

Advisor: Well, a few weeks ago you said you wanted to be all out of stocks because of BREXIT, the potential for full scale escalation in the Middle East, China slowdown, U.S. economic growth stalling, and global warming.

Client: Yes, but stocks are making all-time highs, why am I not more invested in stocks?

Advisor: Well, you are also retiring in two years so we agreed at the beginning of the year to take some risk off the table and prepare for your income needs in retirement.

Client: Right, but why am I not more invested in stocks?

Advisor: Ok, so you want me to raise your equity market allocations?

Client: Yes, stocks are making new highs.

This is what the market does. It causes people to do exactly the wrong things at exactly the wrong times because the fear of missing out is simply too much for most people to handle.

 

Be fearful when others are greedy, and be greedy when others are fearful.” ~ Warren Buffett 

 

 

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