Last week was a tough week for investors, given that the market dropped for six consecutive days. It was an even tougher week for financial advisors and investment managers who have been advising clients to keep a heavy allocation of stocks in their portfolios.
Advisors who are telling their clients to invest a greater percentage of their portfolios into stocks should be able to answer clients’ questions about why they are so optimistic that stock prices will continue to increase.
Investors, likewise, should ask why they are following that advice. Investors need to be accountable for their future. If their advisors are wrong, they will pay the price, not their advisors.
Answer These Questions
Given the state of the world economy – and stock markets throughout the world – many questions need to be answered. Here are some of them:
Where is future growth going to come from? Don’t look to China, which may claim to be growing at 7% this year, but few believe it. Don’t look to the U.S., where baby boomers are retiring and millions of people in all age groups have stopped looking for work.