Behavioral Science to Help Investors During Strange Times
Steve Wendel talks about how investors are thinking about the next downturn and saving for their own retirement.
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Steve Wendel: It may seem that, well, what do we have to worry about? The market's recovered! We're fine! But perhaps a client might say that, but as a financial professional, you know that we have no idea what's going to happen next. It may be that things keep on going up, and we're fine. Again, at the time of recording, the market was at an all-time high, but that may of course change tomorrow. It may change in a month; it may change in a year. We don't know, and the best thing to do is prepare for those contingencies. And you may not realize it, but this is actually the best time to prepare for such downturns. The reason is that we've had a recent--and very severe, of course--drop in March and April. And that is a recent memory that makes this stuff real. It makes it important, and people can say, "Yes, this is something that I should spend my time on." So the investor is more likely to agree to thinking about and working towards future downturns, working to prepare for future downturns.