COVID19, Market Volatility and Staying Calm

The author had a Trust client that I will call Mr. B, a decorated former Marine. He built a highly successful business after he left the Marine Corps and eventually sold the business at a favorable valuation. While most of the author’s trust clients were highly stressed by the housing bubble collapse of the last decade, Mr. B was unruffled. When I asked the secret of his calm during the market storm, he shared the advice he once gave fellow marines when taking heavy enemy fire - “keep your head down and make no sudden moves.” A recent survey of CFP® practitioners implies that Mr. B’s admonition may be timeless wisdom, both in the foxhole and when markets tumble. Consider the following excerpts from the survey:

Excerpts from CFP Board’s April 21 press release

“CFP® professionals are reporting increased client inquiries during the COVID-19 pandemic, with more than 78% of survey respondents reporting an increase.

  • During the COVID-19 pandemic, clients are contacting CFP® professionals with a range of concerns, with more than 70% of survey respondents reporting clients raising concerns with managing volatility, and with protecting assets.
  • CFP® professionals are recommending that their clients take a long-term view as they address their financial concerns.
  • More than 36% of survey respondents say their primary advice to clients is “Sit tight. Wait to make any major financial decisions until volatility decreases.”
  • More than 16% of survey respondents say their primary advice to clients is to rebalance their portfolios.
  • Another 16% say their primary advice is to review and update short- and long-term goals.”

While reasonable investment minds might add nuances such as “buy good stocks at discounted prices” to the CFP® practitioners’ advice, few of us would disagree with the advice to “stay focused on the long-term. This, too, shall pass. Do not panic.” You had it right all along Mr. B - may God bless you, our heroes in uniform and our brave healthcare workers on the front lines.