"When the market is going up, most people get complacent and sit on their thumbs ... nothing to worry about".
...and at the risk of overblogging y'all to death:
It is so true.
And consistent with that equation (the corollary, as it were) is that most folks in the investment advice channel are busy selling their clients on the buy and hold strategy ("nothing to worry about"). When the market starts to go the other way and all their client's money is spent (fully invested), only the very brave advisor will come out from their hiding place to hold their clients hands through the volatility. Most don't want to answer the question "why didn't you wait?" (so you may end up talking to an assistant instead).
The "psychology" is proven time and time again when the individual investor participates the most at market highs (on the buy side), finally convinced that things are safe again. And once again waits until thay can no longer stand the pain to "abandon ship" (usually at a market's lows).
And as Paul said in his blog: we (at High Rock) get the most attention when things are looking grim because all of a sudden we don't sound like such a bad idea after all (the alternative). We were crazy busy taking on new clients in March and April.
The point is, quite clearly, why put yourself in a spot where you are going to have to ride out the storm and suffer more discomfort (have your retirement scenario put on hold, perhaps) as a result?
The on-going conversation we have surrounds people's basic priorities: but generally financial matters are on the back burner until they matter and usually it is when something is going awry:
"If it ain't broke, don't fix it!" goes the old cliche.
Why drive the old model if you can get the new (and improved) one and it costs less?!
How is that for an idea?
Sleep better at night.
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Scott Tomenson,CIM Managing Partner, Chief Investment Strategist