Calming Client Fears With a History Lesson
by: Jennifer Lea Reed
During times of economic uncertainty, advisors should remind clients of the lessons of history, says Jason McKinney, senior vice president and business consultant at John Hancock Investment Management. “It’s not timing the market, but time in the market,” McKinney said at a recent industry| event. Now is the time to calm clients with a historical perspective about what market volatility really does to a portfolio, said McKinney. Looking at the last 100 years, he said, returns are positive 73% of the time and negative 27% of the time. The most common occurrence is that the stock market ends up more than 20%. And while the long-term average return is 9.7%, the stock market has ended a calendar year up 8% to 11% only four times, McKinney noted.
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