Financial advisors see no one-size-fits-all

Financial advisors see no one-size-fits-all in a stock slump

MIAMI TODAY NEWS
JANUARY 2019 - FINANCIAL TRENDS 
By Catherine Lackner 

The stock market's major decline at the end of last year took many investors by surprise; one professional group that likely was very well prepared for it are the financial advisors who help guide Miami investors. During a stock market slump, there is not a one-size-fits-all answer, observers say. But most financial planners would advise clients to stay put and resist the urge to panic. 

"The December selldown was severe; it was the worst quarter since 2008. That hit the news flow hard," said Mason Williams, chief investment officer of Coral Gables Trust Co. "Our clients, in general, have multigenerational, multi-year time horizons," he said. "They can leave their investments untouched for decades or more. But, yes, individual investors or owners of stock accounts could be voicing some nervousness. So, know your client," he advised. "Get ahead of the situation and call them to make sure everything is OK. The market is cheap right now; ask if there's any new money worth committing to it. But most important, urge them to step back. This is a good gut check to test their level of risk tolerance," Mr. Williams said. 

In the worst-case scenario, clients panic and pull out of the market altogether, missing the benefit they would have reaped during the recovery cycle, he said. "You have to be prepared and OK with holding on," he said. "Otherwise, you could abandon a perferctly good plan. In a quarter or two, you might have had those gains back if you had done nothing. With new clients, it's always a matter of educating them" Don't invest for the emotion of the market," he said. "Don't try to time the market. Our clients usually are on par to make their goals." 

"Our clients at Matlins Financial Consulting hire us to actively manage their portfolios," said Neil Matlins, a former hedge fund manager who now is a registered investment advisor. "Our strategy builds upon trends in money flow, technology, demographics and the track record of corporate leadership. At times like these, our role is to analyze the trends and events that are driving volatility. From there, we are able to set medium- to long- term expectations for the economy and markets. Based on the factors we are analyzing today our outlook remains positive," he said. 

"The swing in market valuation that took place from Q4 2018 to Q1 2019 calmed fears that a recession is on the immediate horizon," Mr. Matlins added. "The Federal Reserve chairman helped stabilize the market when expressed a willingness to moderate the pace of monetary tighnening. This implied that the of interest rate hikes would decelerate in the new year, providing a welcome sigh of relief for the markets. At Matllins Financial, it's business as usual for the time beign, and we are optimistic that the market upcycle will continue throughout 2019."