Advisers often give two directives to anxious clients: “Stick with the plan” and “Don’t check your portfolio every day.”
Sticking with the financial plan that investors pay their adviser to customize for them is relatively easy. But for some investors, it’s hard to resist repeatedly checking their brokerage balance.
Some people even will track their portfolio every hour. It’s almost reflexive: If they have a spare minute, see how the market’s doing and look for those reassuring green indicators.
“We tend to help these clients get off that cycle,” said Jeremy Kuhlen, a certified financial planner in Richmond, Va. “It can have an impact on the psyche, especially if the numbers are going down and that triggers stress.”
Some investors are merely curious. They’re not tempted to place excessive trades and are able to withstand wild fluctuations without flinching. “For some people, it’s a hobby,” Kuhlen said. “They like to keep score. It’s how they spend their time, following companies and seeing how they’re doing on a daily basis. It’s not emotional for them, so it’s not a problem” to monitor stocks with such frequency.
Yet for individuals who dwell too heavily on their account balance — and find that market volatility affects their mood and even their overall mental health — Kuhlen suggests ways to help them cope. For example, he encourages investors to limit their portfolio tracking to predetermined times. “You need to wean yourself off looking multiple times a day to once a day,” he said. “Then once a week. Then once a month.”
Savvy advisers know that lecturing or scolding clients for compulsively counting their money won’t produce results. Few people respond well to a professional who expresses disappointment in their actions or disapproves of their behavior.
Instead, advisers may pose supportive, non-threatening questions as a way to get clients to conclude for themselves that they need to change.
Matthew Schwartz, a Minneapolis-based certified financial planner, likes to ask, “How does your daily time spent checking your portfolio help you accomplish your goals?”
“People are going to do what they think is best,” Schwartz said. “We’re not here to direct or dictate. We’re here to understand them, to ask a lot of questions to help them gain perspective.”
Like Kuhlen, Schwartz doesn’t worry about investors who feel in control of their money and derive comfort from keeping close tabs on their account. He’s more concerned about investors who get consumed with the latest stock swings.
For those who find weekends boring because stock markets are closed, their adviser may dig to uncover deeper issues. For example, clients who feel lonely may use their brokerage account to fill a void. Unhappy workers who lose interest in their career may turn into nonstop stock-watchers in the hope of retiring earlier.
“It’s searching for the reason behind their behavior,” Schwartz said. “It’s important to understand why. If they don’t have a great relationship with money, they may have feelings of anxiety or emptiness and lose out on the richness of life.”
When Schwartz meets a new client, he starts by asking, “What’s the meaning of money to you?” Their answer reveals their priorities along with their personal history with spending and saving.
“That question sets the foundation for our working together,” he said. “It gets them to talk about the purpose of money, and how it will be used to enhance their life. Hopefully, they find meaning in their relationships with friends and family, not what happened today with their stocks.”