Global View Investment Blog

What to Do After a Stock Market Crash: The Best Financial Advisors (Greenville SC) Know

A bull market is when prices are up. A bear market is when they’re down. Investors “know” what to do in a bull market: Prices are going up, and everyone wants to jump on the bandwagon and get some for themselves. But that’s not the right thing to do. And investors should know what to do after a stock market crash.

The best financial advisors in Greenville, SC know. And we want to share the secret with you. You need to have a plan in place.

 

Want to talk to a real fee-only fiduciary who has your best interests at heart? Contact us with any questions or to schedule a complimentary financial review.

 

We’re currently in a bull market. And we’ve been there for some time now. In fact, it’s the second longest bull market in U.S. history. But because we lived through the last two bear markets (in 2000 and 2007), we know you can’t predict when they will happen. This means you must have a strategy in place. If you’re not a Global View client, you might not know the greatest two threats facing investors:

 

1. Unscrupulous salesmen  

The greatest threat facing investors today is unscrupulous salesmen. These con-artists will sell you insurance and investment products that only benefit themselves and their firms. They do not care about the investors, only the commissions they’ll likely make.

How to spot them: These salesmen typically make guarantees. These guarantees generally won’t make an investor any real money, but they will benefit the person selling them to you very handsomely. If an “advisor” makes you a guarantee, this should be a red flag.

 

2. You

I’m sorry to tell you this, but the second biggest threat to investors is themselves. Investors generally only take home about half of what the market has to offer. They buy when prices are high and sell when they are low. It has nothing to do with intelligence. It’s simply because you are hard wired to do it. Our brains don’t naturally adapt to fast-changing financial markets.

How to spot when you’re working against yourself: Are you rationalizing a bad decision? Are you falling for the Fear of Missing Out (FOMO)? Or have you discussed a decision you’re about to make with a fee-only fiduciary who has to legally put your best interests first? If you said yes to the first two questions, it’s time to seek help.

You need to understand this. Especially now.

 

Investors worry about trade war, valuations, rising interest rates and another recession. And they have every right to. But because of these worries, investors often make irrational decisions, and then later rationalize why they did it. This rationalizing may make you feel better in the short term, but it doesn’t do anything for your investments or your pocketbooks.

Global View clients understand how much risk they can take. Truly. Then we make sure to allocate the risk they take to the opportunities available. Remember, risk is theoretical until you face a loss. Then it becomes real. And it can be permanent.

Right now, with rising interest rates, that means we make sure to own bonds that are unlikely to fall when rates go up. We work with our clients to put together investment portfolios that are robust in a bull or bear market. While we never know what will happen short term, we build portfolios that will generate positive returns over reasonable time horizons of three years. We look at investment quality, growth and valuation, and then act accordingly. Because we are fee-only fiduciaries and are only paid by our clients (never by investment managers or brokerage firms), we always put our clients’ interests first. Legally, we have to.

We also invest right along side you.

At Global View Investment Advisors, we view risk management as a serious ongoing responsibility:

  • We make sure we have a valid assessment of your risk tolerance.
  • We make sure we know your capacity to bear risk (and what this means to your odds of achieving your goal).
  • We talk to you about risk on a regular basis.
  • We build modeling into your financial plan so you can get a better idea of what risk will look like to you in real terms.
  • We help you evaluate risk across all your holdings, not just the ones we manage.

This is all preventative, so you don’t overinvest when things are frothy. Or sell out in panic at the bottom, because you had too much tied up in that asset. Or, ultimately, lose money you can’t make back.

Having a proper plan in place, knowing what to do after a stock market crash and working with a real fiduciary has to be done, since we, as human beings, are fighting human nature.

Global View wants to keep you on the right side of your emotions, so your wealth lasts.

Let’s talk.

 

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Ken Moore

Written by Ken Moore

Ken’s focus is on investment strategy, research and analysis as well as financial planning strategy. Ken plays the lead role of our team identifying investments that fit the philosophy of the Global View approach. He is a strict adherent to Margin of Safety investment principles and has a strong belief in the power of business cycles. On a personal note, Ken was born in 1964 in Lexington Virginia, has been married since 1991. Immediately before locating to Greenville in 1997, Ken lived in New York City.

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