As I watched and listened to my client in her Zoom window, I reflected on how much had changed since the conversation we had just a year ago. At that time, when the pandemic was shutting down economies worldwide and the markets were plunging in response, she had gotten in touch, as many clients were doing. Unlike many of them, though, she had been relatively calm as we discussed the rapidly unfolding events. “It seems like we’re fine,” she had told me then. “I guess there are going to be some crazy market swings, but long-term, don’t you think we’ll be okay?”
I assured her that I agreed with her assessment—admittedly, displaying a little more composure than I was feeling—and we concluded that it was best to remain disciplined, “stay inside the vehicle,” and perhaps watch for tax-loss harvesting opportunities as we continued to rebalance her portfolio. We ended the call on an upbeat, pleasant note.
Now, a year later and with a new administration in the White House and a different party in control of both houses of Congress, my client—we’ll call her Roberta—looked and sounded discouraged, flat, and, frankly, pretty beat up. “I don’t know, Kimberly,” she was saying. “We’ve passed the one-year anniversary of this thing, and though it’s good to see the vaccines getting out there, nothing much really seems to be changing. Now they’re talking about all these new variants of the virus … It just seems like it’s going to go on forever, in some form. Or maybe the next bad virus is out there, and we’ll have to do this all over again because of a different bug.” She proceeded to tell me that she was having doubts about her asset allocation—this, despite the fact that her portfolio showed a net gain during 2020—and was thinking of postponing some gifts she had been planning for several years to make to her grandchildren, “in case things get worse and I need the money myself.” Not quite as uplifting as our conversation the previous year. In fact, at one point in our Zoom meeting, I was feeling almost as beat up as Roberta appeared. As I mentioned in
Coincidentally—or maybe not—that very same day I had listened to a podcast on the theme of “What You Focus on, You Fuel.” The presenter talked about how, during times of difficulty and challenge in our lives, we tend to home in on the details of our problems, and we quickly lose sight of the big picture. He suggested that it’s a good idea, sometimes, to “zoom out on doubt” and remind ourselves of all the other good things that are going on. In other words, if all we think about and focus on is everything that’s wrong, we forget about all the things that are right.
I really needed to hear that! And as I thought more about it, I realized that this was a message my clients needed. Maybe you need it, too.
Admittedly, we do spend a certain amount of our time, as advisors, preparing our clients for various unpleasant circumstances. One of the reasons we build diversified portfolios, for example, is to offer protection against volatility in one or more market sectors. We caution retired clients about sticking with their budgets, because we don’t want them to out-spend their resources—another hedge against a worst-case scenario. We offer a lot of advice that is intended to protect our clients from the bad things that can happen in the markets and in the economy.
But at the same time, we shouldn’t ignore the signs of hope that are all around us. And, if we’re doing the right thing for our clients, we also need to remind them that all is not doom and gloom. As more and more Americans receive the vaccine, we get closer and closer to the point when life can begin to resemble something more like normal. We need to “zoom out on doubt” and remember that real progress is being made.
We’re also learning that the rate of infections may not be as great as we believed at first. According to
So, after listening as Roberta “zoomed in” on all the problems and difficulties she saw in the landscape, I finally had an opportunity to help her step back from the trees and take a look at the rest of the forest. I started by asking her if she’d had her vaccine yet, and she told me she’d had her second shot of the Moderna vaccine a week previous. “That’s great,” I told her. “After about another week, you should be at peak immunity, according to the experts. You probably have other friends who’ve been vaccinated, right? Just think: you’ll be able to go to their houses and play bridge, or drink wine, or whatever. And once your grandkids are vaccinated you can hug them, and you won’t even need a mask.” Roberta thought about that for a second, and I’m pretty sure she cracked a tiny smile.
To systematically understand the families you work with, first get to know their views on key behavioral-finance criteria, writes Michael Liersch.
“And remember,” I told her, “your portfolio actually had a healthy gain in 2020. At the height of the pandemic, would you have thought that was possible?” She admitted she hadn’t. I talk to clients every day who still haven’t fully grasped the fact that the major stock indexes ended the year with positive returns, notwithstanding the gut-churning drops that we watched in the spring.
The point is, if we zoom out from the problems that can take over our minds and our attitudes, there really is good news we can and should share. Our clients look to us for real-world advice, and that means that, just as we should never give them false hope, we should also never give them false despair.
Some of you might be thinking, “Kimberly, aren’t we a little old to be watching Pollyanna?” But remember, I’m not advocating that we forget about the potential dangers that are still in the environment. I am saying that we need to be giving, at minimum, equal time to the hopeful developments.
There’s a phenomenon that is well-known to submarine crew members, Antarctic researchers, and astronauts on space missions. It’s called “
As financial advisors, we, along with our clients and everybody else, are in the third quarter of this pandemic. The game isn’t over yet, but we can sense the final buzzer approaching. As our clients show signs of anxiety, vulnerability, and worry over the problems that are monopolizing their attention, we need to be reminding them of why they came to us in the first place. We need to remind them of all the reasons for hope. Our clients—all of us—need more hope. Let’s make it happen. Let’s “zoom out on doubt.”
