The three major American stock market indices – the Dow Jones, the S&P 500 and the NASDAQ – have all approached or reached record highs in the last month. On July 10, the S&P 500 topped 3,000 for the first time.
Whether the market is rocketing skyward or falling fast, investors with significant investment in individual stocks or stock mutual funds want to know how the rise and fall impacts their portfolio. This recent turn for the better has increased communication desires and demands as investors hope to take advantage of the spurred market.
As part of Spectrem’s monthly research with wealthy investors, it recently asked whether they have heard from their advisor to discuss the recent uptick in the market numbers. Among more than 500 investors, 55 percent said they had indeed received a call from their advisor to discuss the impact of the market on the investor portfolio.
Throughout Spectrem research, studies have shown that investors appreciate and expect advisors to be proactive in making contact in situations where current events warrant a conversation. In this current situation, such contact is a positive occurrence and should be easy to conduct, as opposed to those times when the market is down and advisors need to tell investors how to cut their losses.
Of the investors who have heard from their advisor recently to discuss the mounting market levels, there is a near-even split of those who were receiving a call to discuss specific investment topics and those who were receiving a call to discuss the market and their portfolio in more general terms. There might be a difference between discussing market movement with an investor who frequently alters his or her portfolio to match current market conditions and those who prefer to take a long-term view of their portfolio allocations with little intent on changing based on current events.
Almost half of investors (46 percent) who have received advice from their advisor about current stock market volatility gave been told to stand pat. While only 5 percent have been told to increase their investments, 19 percent said their advisor advised them to reallocate assets to move into the more lucrative products and away from the more static ones. Six percent of investors were told to reduce exposure, while 22 percent said they have not received any advice from their advisor related to current market conditions.
Another interesting aspect of the survey is that 64 percent of investors who received contact from their advisor to discuss current market conditions were contacted by phone. Considering how often people today ignore phone calls, depending instead on some form of electronic or digital communication, almost two-thirds getting actual phone calls indicates that advisors understand the immediacy of telephone contact.
Twenty percent of investors received individual emails from their advisor to offer a conversation on investment changes, while only 1 percent were contacted by text.
©2019 Spectrem Group