DLS Consulting

How did You Handle Last Week's Stock Market Drop?

Even though I officially retired from Merrill Lynch in August, 2005, a stock market decline like last week brings back memories from the previous market scares of days gone by.  I will not pretend to know what is the right answer for your clients when they want to panic and you are not sure exactly the advice to offer them.  I will not tell you that in my day we never faltered on keeping the faith and always pointing clients in the right direction with long term wisdom.  The pain you feel in your stomach when a client is hurting from news that the market is not performing well and the impact it might have on their assets is not an accident.  It is indeed the storm that defines many of our difficult days when you are asked to provide investment advice and the downside movements in the market make your job difficult.

One thing I did learn from times like this is that if you keep in touch with clients during down periods and talk with them and make sure that their objectives and comfort levels are still the same as what you agreed to during your previous reviews, then they will always remember that you are not afraid to talk with them when times are tough.  So make the difficult call to the difficult client and talk with them about what is happening so they know you are thinking about their interests.

The second thing I learned is that if you can take advantage of down markets to be a contrarian and find great values in investments that have been beaten down, this is a wonderful time to do your homework and enhance value for your clients. 

The third lesson you can learn is that it is time for you to start a new book, learn a new idea, or seek wisdom from another person who you respect.  For the new book, I want to recommend a book that I have mentioned before.   Randy Alcorn’s, Money Possessions & Eternity is an absolute must for everyone Christian who struggles with how to prioritize money and possessions.  It is times like this when your mind and heart are open to new ideas and thoughts and your focus will allow you to absorb things you might not stop to think about.

Here are some excerpts from p. 31 of the book:

  • “The average American shops six hours a week but spends only forty minutes playing with his or her children.”
  • “By the age of twenty, the average television viewer has seen one million commercials.”
  • “Recently, more Americans declared bankruptcy than graduated from college.”
  • "In 90% of divorce cases, arguments about money play a prominent role.”

Some Bible passages to reflect on this week:

Isaiah 41:13  “For I am the Lord, your God, who takes hold of your right hand and says to you, Do Not Fear; I will help you”

Sent March 5, 2007

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