Despite the current upward trend in stocks, fueled most recently by good earnings, the economy remains weak. People are still negative on the economy and the economic outlook; this has important implications for how you approach clients as you begin to meet with them one last time before year-end.
To illustrate, the CNBC All-American Survey was just released (You can read about the survey by clicking this link: Americans Growing More Pessimistic About Economy).
To summarize some of the results:
* 92% of respondents feel that that the economy is either doing no better than last year, or doing fair or poor
* Only 37% think the economy will improve over the course of the next year – down 5% from last year’s survey
* Only one in four think wages will rise over the next year, and only one in five that their house will increase in value over this same time period; these are the worst results in the 3 years that the survey has been taken
(There are also some interesting results on the political front in the survey – definitely worth looking at the complete survey.)
Americans are not feeling very optimistic – the official end of the recession and the rising stock market notwithstanding. This means that as you meet with clients, it’s important to realize that empathy is more important than ever. I would hesitate to give client’s only good news – put yourself in their shoes and think about what they might want to hear.
Now more than ever, client’s are looking to their advisors (or money managers) to reassure them. Even if their portfolios are up, it’a obvious that concerns linger. Reassurance and realism will keep them invested. Sugarcoating the situation may lose you a client.
