Investor Confidence Waning?
Recently as I have been meeting new prospective clients, I have felt a general reluctance on their part to commit to long term planning and they are generally having more difficulty making financial decisions than at any time in the last two years.
Last week I met with a group of clients and asked them an open ended question to see if I could confirm my feelings: “Think about your friends and neighbors. In three words or less, jot down how they are feeling right now.” I was dismayed, but not necessarily surprised, at the answers I received. The most often used word was: “concerned.” They also used words such as: “worried”, “uncertain”, “powerless”, “frightened”, “short tempered”, “tired”, and even “helpless”. None of the answers contained positive, hopeful, or forward looking sentiments! Now these are very successful individuals living in the heart of Silicon Valley. I assume their friends and relatives would be similiarly well off. Yet they all resonate with a very somber mood at the present time.
This was echoed in a recent article at www.financial-planning.com entitled “Affluent Investor Confidence Hits New Low.” The author, Mason Braswell, quoted a Spectrem Group report that stated, “While affluent investors keep cognizant of stock market conditions and the economic environment, they are increasingly focused on how the political climate will affect their investment plans.”
What should investors do now? I believe it is prudent at this time to be cautious on equity investments but remind my clients not to take their eye off long-term planning. We will get through this period of uncertainty as surely as the many we have in the past. I feel your concerns (and those of your friends and neighbors). As always, our team is here to help make your journey a more confident one.
Your retirement guide,
Paul S. King, CFP®