From 1987 to 2020: perspectives on bear markets

It is interesting that this is the exact time frame since I became a financial advisor, fresh out of Tulsa University with my BSBA in Finance and halfway through my MBA.

I could totally identify with Rudy Luukko, who wrote this piece just as the Covid - 19 crisis ramped up on March 30, 2020. What followed was government-mandated shutdowns and social isolation, soaring unemployment and dismal GDP and earnings forecasts, advisors face tough questions. At the extremes, client reactions fall into two main types: fear versus greed.

From anxious investors: Why not just sell now and get out of the market? They feel the situation keeps getting worse, that their losses are mounting, and that there’s no end in sight. By going to cash, they say, a dollar will still be a dollar, no matter what happens. Better to be safe than sorry.

From bold investors: With the stock markets having plunged, isn’t this a great time to buy? These could be people who have recently sold a house or business, freeing up cash, or young people thinking of investing for the first time. For them, these beaten-up stock prices seem too good to pass up, especially if they have no need to sell soon.

Since the bear market began in mid-March, friends have personally asked me both of these types of questions. Because of these and other conversations I’ve had with countless individual investors in the course of my decades as a journalist specializing in retail investing and personal finance, I can relate to what advisors are dealing with now.

As someone who has invested in the financial markets since the early 1980s, and now as a 60-something semi-retiree who has watched his household retirement assets take a significant hit, I can also relate to the pain many investors are feeling. From the advisor perspective, what’s happening in the markets is superseded by the impact on clients. One client’s crisis, whether real or imagined, can be another client’s perceived opportunity.

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