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FAs Weigh In: Emotional Responses to Markets Amid Pandemic Off the Charts

By Rita Raagas De Ramos February 17, 2021

FA-IQ reached out to advisors to ask: What are you most hopeful about in 2021 when it comes to your advisory practice?

Jonathan Blau, president and CEO at Fusion Family Wealth. Woodbury, N.Y.-based Blau has been in the industry for 30 years and has more than $1 billion in client assets.

“Many investors either don’t have a plan or, if they do, in 2020 they stopped acting on their plan and instead reacted to the current events and market dislocations associated with Covid-19.

For the first time in decades investors faced concurrent fears of an existential threat — the possibility of facing their mortality or that of a loved one — and the threat of economic ruin. Wealthy investors generally find it difficult to make rational money decisions under conditions of uncertainty. The combination of these two fears drove emotional market/money responses to levels I have not witnessed in my three-decade career.

Many clients and centers-of-influence who benefited from our expertise in behavioral investment counseling stuck to their plans and actually took advantage of the temporary price declines — by purchasing more equities at deep discounts to their long-term enduring values — in the great companies of America and the world (i.e., S&P 500).

Jonathan Blau

As the second half of 2020 did, I am hopeful that 2021 will yield many opportunities to offer [behavioral investment counseling]-based guidance to many investors who will be encouraged to seek our counsel by our clients who succeed by steadfastly following their plan.

Our credo is that all successful investors are goal-focused and planning-driven such that all successful investors are continually acting on a plan. All failed investors are market-focused and performance/current events-driven such that all failed investors are continually reacting to news and the markets.”

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Tags:  Finding and winning new clients , Client retention , Staffing and recruiting , Investment strategies , Portfolio management , Behavioral finance

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