Hopefully, like us, you subscribe to the "It's time in the market, not timing the market" adage more than you do the "Sell in May and go away" one.
We all know that the summer months will be slow, and bumpy - they almost always are. But that is not reason enough for clients to exit the market and abandon their long-term investment strategies.
Typically, August and the first half of September are the "worst" times in the market - so you still have plenty of time to prepare your clients. Here is a good five-step plan that you can utilize with clients to prepare for market volatility:
1) Don't Panic - it's important to tell clients to take a deep breath and take the time to analyze the situation;
2) Get to the Truth - find out exactly what is causing any selloff or volatility. Is it stock or sector specific? Is it market-wide, caused by geopolitics?
3) Do a Systematic Check of Client Portfolios - based on what you discovered in (2) you can determine where you should make any adjustments to existing portfolios. Are you over-weighted in some sectors? Under-weighted?
4) Adjust as Necessary (Buy, Sell or Hold) - make the changes needed to strengthen client portfolios and make sure that they are in alignment with the forces that are driving the market; and
5) Formalize a New Strategy - Incorporate what you have learned into a new strategy moving forward. View every market "event" as an opportunity to better prepare for the future.