Stock market volatility can make your clients nervous but is a part of long-term investing. It's difficult at times to stay put when the market is posting negative declines and while every investor is different, there are steps to take. Selling investments when the markets drop can make those temporary losses permanent, especially when many transfer those funds to cash and never reinvest.

While it might be difficult emotionally, rebalancing your client's investments might be a smarter option. Markets typically go up and down, and your clients are likely to experience losses during their investing timeframe. However, it's about minimizing those negatives, especially during bear markets—a period the stock market falls by more than 20%—as timing ups and downs is nearly impossible. Historically, bear markets have been relatively short when compared to bull markets, your clients need guidance on ignoring the noise and staying focused on their plans.

Learning Objectives: 

• Recall and assess a client's risk tolerance 


• List how to properly diversify investments 


• Recognize different types of investment risks 


• Calculate how to avoid scams, Ponzi schemes, and investments that are not transparent 


• Outline conflicts of interest with brokers vs. investment advisers 


• Determine how to use annuities as bond alternatives with portfolios 


• Define tax-efficient investing and tax-loss harvesting