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Advisors often give anxious clients two guidelines: “Follow the plan” and “Don’t check your portfolio every day”.
It’s relatively easy to stick with the financial plan that investors pay their advisor to tailor for them. But for some investors, it’s hard to resist repeatedly checking their brokerage balance.
Some people will even track their wallet every hour. It’s almost reflective: if they have a free minute, see how the market is doing and look for those reassuring green indicators.
“We tend to help these clients get out of this cycle,” said Jeremy Kuhlen, a certified financial planner in Richmond, Virginia. “It can have an impact on the psyche, especially if the numbers go down and it triggers stress.”
Some investors are just curious. They are not tempted to place excessive trades and are able to withstand wild fluctuations without flinching. “For some people, it’s a hobby,” Kuhlen said. “They like to score points. It’s the way they spend their time, following companies and seeing how they are doing on a daily basis. It is not emotional for them, so it is not a problem ”to monitor stocks with such frequency.
Yet for people who dwell too much on their account balance – and find that market volatility affects their mood and even their overall sanity – Kuhlen suggests ways to help them cope. For example, it encourages investors to limit the monitoring of their portfolio to predetermined periods. “You have to wean yourself off watching several times a day to once a day,” he said. “Then once a week. Then once a month.
Savvy advisors know that lecturing or berating clients for compulsively counting their money won’t work. Few respond well to a professional who expresses disappointment with their actions or disapproves of their behavior.
Instead, counselors can ask encouraging, non-threatening questions to get clients to conclude for themselves that they need to change.
Matthew Schwartz, a certified Minneapolis-based financial planner, likes to ask, “How is your daily time spent checking your portfolio helping you achieve your goals?” “
“People are going to do what they think is best,” Schwartz said. “We are not here to direct or dictate. We are here to understand them, to ask them lots of questions to help them take a step back.
Like Kuhlen, Schwartz isn’t worried about investors who feel in control of their money and take comfort from the close monitoring of their account. He is more concerned with investors who are consumed by the latest market fluctuations.
For those who find the weekends boring because the stock markets are closed, their advisor may dig to uncover deeper issues. For example, clients who feel lonely can use their brokerage account to fill a void. Disgruntled workers who lose interest in their careers can turn into relentless punters hoping to retire sooner.
“It’s looking for the reason for their behavior,” Schwartz said. “It’s important to understand why. If they don’t have a good relationship with money, they can have feelings of anxiety or emptiness and lose the wealth of life.
When Schwartz meets a new client, he begins by asking, “What does money mean to you?” Their response reveals their priorities as well as their personal history when it comes to spending and saving.
“This issue lays the foundation for our collaboration,” he said. “It gets them to talk about the purpose of money and how it will be used to improve their lives. Hopefully they find meaning in their relationships with friends and family, not what happened today with their actions.
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