• Research and data-driven behavioral insights to guide client conversations

  • Practical application of behavioral finance to portfolio construction, management and analysis

  • Ideas, guides and materials designed to differentiate and grow your practice

  • Current market conditions from the Behavioral, Economic, Valuation, and Technical perspectives

Behavioral Advisor Perspectives and Practices: Practical Planning Is Your Compass

The next several weeks are going to be challenging for advisors and investors. The reality of the scope and severity of the pandemic along with the associated economic and market damage will hit home raising fear levels to new highs. In these times, it will be hard not to overreact, panic or lose hope. Strong emotions and behavioral biases including, anchoring, loss aversion, cascading and availability bias can cloud our thinking and lead to poor decision making. Engaging in realistic and practical planning discussions along with relevant behavioral coaching can provide essential support during these challenging times. 

PlanningFramework

We have talked with our advisors and are working closely with them to mitigate potentially serious long-term damage by helping clients to avoid costly behavioral mistakes. In the current environment, planning discussions should focus on changes in the clients circumstances and their needs in the next 3 to 12 months.

  • How are they, and the people they care about, holding up and handling the situation? Are there any particular concerns or needs they want to discuss?
  • Address specific, known or potential, changes in circumstances in the next 12 months and how plans can be adjusted to prepare for them. Particularly liquidity and income needs.
  • What are immediate liquidity needs for the next 90 days and how can they best be met?
  • What are expected liquidity and income needs for the next 12 months and how can they best be met? Can any outlays be delayed?
  • Conserve or raise cash up to 15% of the overall portfolio to provide a temporary cushion.
  • Make portfolio and investment changes in the context of specific needs, plan adjustments and long-term goals.
  • Remember that smart decisions made now can protect valuable resources that can grow to meet long-term goals when markets recover.
  • Remind clients that while this moment is difficult, it will pass with time and won’t always feel like this.
  • Putting a flag in the ground and having concrete and actionable plans can reduce stress and provide a valuable compass that can be revisited and revised as needed.
Additional planning and behavioral coaching resources can be found here:
 

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IMPORTANT INFORMATION AND DISCLOSURES

The information provided here is for general informational purposes only and should not be considered an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. It should not be assumed that recommendations of AthenaInvest made herein or in the future will be profitable or will equal the past performance records of any AthenaInvest investment strategy or product. There can be no assurance that future recommendations will achieve comparable results. The author’s opinions may change, without notice, in reaction to shifting economic, market, business, and other conditions. AthenaInvest disclaims any responsibility to update such views. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of AthenaInvest.

You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives and financial circumstances. You should consult with a qualified financial adviser, legal or tax professional regarding your specific situation. Investments involve risk and unless otherwise stated, are not guaranteed. Past Performance is no guarantee of future results.

 

Contact

AthenaInvest Advisors LLC
5340 South Quebec Street, Suite 365-N
Greenwood Village, CO 80111

Phone:   (877) 430-5675
Fax:        (303) 721-6294
Email:     support@athenainvest.com