President's Letter - New Investor Research Post-Corona Crash


Most investors are holding steady and waiting for the market to stabilize, according to research recently completed by Spectrem Group. In fact, only a small percentage of investors (9 percent) indicate they have actually sold equities in the past few weeks. Overall, our research indicates that investors are doing just as their advisors have told them and investing for the long term.

This new research, The Corona Crash: What Advisors Should be Saying to Investors Now, was originally fielded to determine if the election or coronavirus fears were driving market volatility. Since that time it has become clear, due to Joe Biden taking the lead in the Democratic primaries, that the current instability is due to the spread of the coronavirus. The research indicates, however, that although investors are worried about the health issues, they are logically thinking through economic issues. 

What should financial advisors be aware of?

- Investors are anticipating that their advisor will reach out to them if they need to make changes, but for the most part, they prefer to communicate in the manner and timeframes in which they usually communicate.
- Investors are relatively positive about what will happen with the market and the economy in the rest of the year. A quarter of investors think the market will return to where it was, a similar percentage think it will recover but not go as high as it was and a similar percentage think it will just remain volatile throughout 2020. Very few think it will go lower.

As mentioned above, only 9 percent of investors have sold equities in the past few weeks while 17 percent have purchased equities. Three-quarters of investors have not made any changes to their portfolios.


Is it possible that much of the volatility is being caused by institutional investors and automated program trading rather than retail investors?

Overall, investors remain somewhat positive about the economy and their future financial situation. As this situation continues to unfold, it’s critical that financial advisors remain a voice of calm in the storm and continue to proactively communicate with investors.

Check out the full report, Corona Crash: What Advisors Should be Saying to Investors Now. It provides additional insights into effective strategies that have been used by advisors.