Another difference is that doctors are frequently asked for free advice at cocktail parties and other places. Financial advisors are also frequently asked for free advice. The difference is that there is no cyclical trend in doctors being asked for advice. It is relatively constant. Their advice is always wanted.
There is a strong cyclical trend in financial advisors being asked for advice. When the stock market is up, investors tend to be overly-confident and are more likely to tell the financial advisor what to do, rather than ask for the advisor’s advice. When times are good, people think they don’t need financial advice.
At the grocery store yesterday, I ran into two people I know, who almost immediately asked me about the stock market. When the stock market is down, over-confidence is also down, and people suddenly want advice from financial advisors.
I could be rudely dismissive to them. Or, I could smother them with “buzz-words” they wouldn’t understand. I could even give them a learned opinion. But, they are human beings — human beings dealing with fear, who are really just asking if they need to be afraid.
That is an easy response: The world is not ending. There may be a mild recession, but that will not the first one nor the last one. We’re still the greatest nation . . . both on Earth and in history. Then, I paraphrase Warren Buffett by reminding them I don’t know where the stock market will be next week, but I do know where it will be in five years — UP!