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What does the Debt Ceiling Debacle Mean for Your Clients? by Mitch Anthony
Chances are your clients are nervous about what’s been going on in Washington. Regardless of the outcome (and perhaps because of it), they’re feeling unsettled. As your clients’ trusted advisor, you can help ensure the journey goes smoothly by letting them know you’re there for them. My goal is to help you help your clients.
Because I feel this is such an important issue to you and your clients, I’ve decided to focus this issue on helping you address your clients’ concerns. In StorySelling for Financial Advisors, Scott West and I discuss how to use stories and metaphors when working with clients, and features many sample stories that we encourage readers to use and/or adapt. What follows are a few stories that are as relevant now as they were when the book was first published—please use and adapt them to help your clients feel more at ease with what’s going on:
How Important is the Dow Jones Industrial Average? (page 220):
“People often become anxious and fearful when they hear the media shouting about the Dow going up and down. Have you ever wondered how important the number really is?
The Dow Jones Industrial Average represents only 30 stocks out of the more than 35,000 stocks that trade on the various exchanges in America. The Dow represents only 0.09 percent of all the stocks traded. The number the media shouts about excludes what is happening to the other 99.91 percent of stocks.
Even when the Dow is going down or on its weekly rollercoaster ride, there are good investment opportunities in the other 99.91 percent of stocks out there. Don’t let the headlines about the Dow average seem any more significant than they are. It’s like saying that the NFL is in a major slump because one running-back is having a bad year.”
On Predicting Bear Markets and Long-term Investing (page 214):
“Predicting when we will see a bear market is equal to predicting when a dart will hit a bull’s-eye. The majority of the time throughout market history, the markets have been rising. History shows that the chances of your money growing in stocks is much like the odds of your next dart hitting any number on the dartboard but a bull’s-eye. If you are going to try to time moving money in and out of the market, you have to ask yourself how confident you can hit a bull’s-eye every time you do it.”
On Market Ups and Downs (page 213):
“Do you know what investing for the long run, but listening to market news every day is like? It’s like a man walking up a big hill with a yo-yo and keeping his eyes fixed on the yo-yo instead of the hill.”
On Staying Above the Emotional Fray (page 224):
“People become hyper about the market when they listen to hyperbole. The press, in an effort to get viewers’ attention, exaggerates events in the marketplace and thus excites the emotions of investors who are swayed by fear. This emotional Ping-Pong game results in illogical investment behavior, such as buying at market highs and selling at market lows. The wise investor has learned to look past the colorful adjectives that describe daily market fluctuations and to keep his or her eyes fixed on long-term trends.”
On the Importance of Diversification (page 233):
“Markets are unpredictable. That’s why we preach putting your money in many buckets––or diversification. Like the Ferris wheel, if one bucket happens to turn upside down, all the other buckets you’ve invested in are still upright. What kind of shape would you be in if all your money was in that one bucket? If one bucket goes upside down, you’d better be in the others.”
Explaining Stock Value Versus Yield (page 238):
“What do you tell retirees who are receiving monthly income from the investments but are worried about the fluctuations in the value of the investments? One advisor used the following illustration:
‘If you owned farmland, what would you be most concerned about, your yearly yield or fluctuation in the value of your land? Farmers are most concerned about getting paid each year for their crops and are not worrying about land values, which move up and down.
That’s the way it is with your investments. Even though some of the underlying investments may move up and down, your number one concern is to make sure that you get your check every month.’”
This is a sampling that I hope will help you help your clients. I encourage you to refer to your own copy of StorySelling for Financial Advisors to find more ideas for communicating with your clients during this difficult time.
Excerpted from StorySelling for Financial Advisors: How Top Producers Sell by Scott West and Mitch Anthony (©2000 by Dearborn Financial Publishing).
Mitch Anthony is the founder and president of the Financial Life Planning Institute, the leading provider of financial life planning tools and programs.
© 2011 Mitch Anthony |
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