By SA For FAs
August 7, 2019
Investment consultancy Dalbar’s latest research suggests that it is a mistake for advisors to assume that investors have a static risk tolerance. The firm’s president Louis Harvey says it changes constantly – on the basis of both market conditions and the client’s constantly shifting personal status. The firm’s analysis of equity flows demonstrates clearly that market conditions prompt clients to buy and sell stocks – at the wrong times. Harvey suggests defining investor goals in simple understandable terms (e.g., “house fund”) and designating separate pools of funds for each investor goal.
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