It was early March and COVID-19 had officially crossed into the US. The market was falling fast and clients’ emotions were starting to rise. Phone calls inbound and outbound seemed endless. Some clients wondered if they should sell while others wanted to know how to put more money in. We constantly looked at all angles for multiple possible outcomes and communicated why it was important to keep client portfolios on course and retirement plans in place. I brought the Wiser team together and said,  “This is why we are here. This is why clients, who all are like family, trust us. This is our Advisor Superbowl and I expect us to guide our clients to a win.”

When investors save into their investment accounts, they picture this climb in account values over time with maybe some bumps along the way. Very few expect to see a COVID-19 type drop or worse, a repeat of the 2008 financial crisis. When they do, human nature can kick in and a flight-mode desire to move investments to cash and “wait it out” takes over. However, Vanguard has great data and client/advisor communications on why it is important to build portfolios to weather all market conditions. In fact, Tim Buckley, the CEO of Vanguard, recently released encouraging data on client behavior during the COVID-19 crash. Despite a 34% drop in the S&P 500 in just over 30 days, less than 0.5% of Vanguard investors abandoned their portfolios and moved entirely to cash. 83% did not make any transactions and 9% actually rebalanced their portfolios near the low of March 23rd. The data also showed that 85% of those that moved to cash would have been better off making no transactions at all. This is great news for the DIY investors, but the Wiser family did even better.

We at Wiser also think long-term and believe building portfolios to weather market volatility is important to client success. Using our low cost, diversified approach to investing, 100% of Wiser clients rebalanced near the March 23rd low and now 100% of Wiser clients have rebalanced again last week to protect those COVID-19 market rebound gains. Everyone’s financial plans are still in “the green zone” so we can breathe a little easier near these market highs.

We explain these current market highs in our podcast this week. You can subscribe to our podcast here.

A prospective client recently asked me why he needed to hire me, since so much financial information is now available online. I simply responded that I was there to protect him from himself. The Wiser team is here to make data-driven decisions instead of emotional ones. We are here to understand what plays are available and when to use them. Sometimes, it is best to sit and do nothing as the clock runs down and at other times, action is required. Regardless, the path to financial freedom starts with a good game plan, which is why we build financial plans for clients that will help them reach financial freedom (AKA sleeping well and smiling a lot). And then, we help them stay the course for the long-term.

Team Wiser for the win! Now let’s hope that really was the fourth quarter for COVID-19 market extreme volatility and that we get to see actual football this year. Either way though, we have a plan.

– Casey T. Smith