Got a call from a Wealth Management firm yesterday. These guys are great fun. Helps me get through the week until Harry Hill is back on Saturday.
How am I getting on?
Fine thanks. We're in our mid 60's and my trading retirement pot has got to where we want it to be so I'm happy sitting out the current volatility in cash and waiting for more settled times, nice position to be in. A bit of dabbling here and there in the odd stock that is bucking the trend, but that's it in these conditions. Don't need to take any risks at present, and don't want to. Quite nice just sitting and watching for a change. Happy just keeping up with inflation for the moment.
Big mistake sir, - that way you'll do no more than keep up with inflation (I've just told you that's all I want, mate!). This is the time to be fully invested. Our analysts have identified loads and loads of cheap stocks after the recent correction and right now is an outstanding opportunity to get into the market. Why not give us all your dosh and for only 1.5% p.a. (plus VAT) you can get richer and richer without any effort from yourself? And, by the way, we prefer clients who just let us get on with it, not ones who follow the market and keep wanting us to justify our investment decisions. We got our clients out at the top of the Tech market just before the crash and got a lot of flack as they thought they would miss out, but that just shows you should not query our decisions, we know our job.
Well I can think of one or two reasons not to hand over the money, actually:
If you think it's a bear market sir, you're very mistaken. A bear market starts with rolling tops on the indices charts, formed over many months. This is just a correction and a superb buying opportunity, you just have to look at the charts.
Well I'm looking at the charts as we speak. The S&P 500 has a rolling top as similar to 2000/2001 as it's possible to get without being identical twins, and the market doesn't know from day to day whether it wants a sh*t or a shave as my wife would say. (She's a plain-speaking northern lass).
You've got to expect some volatility sir. Stocks don't go up in a straight line. These days' people in their 60's in good health can expect to live well into their 90's so if we manage your money for you, you can ride out any short/medium term loss of say 20% to 30% as you'll be bound to be OK over a 15, 20 or 30 year timescale.
Well, my wife and I rather thought it might be fun to use some of our hard-earned dosh whooping it up a bit in our 60's and 70's, not needlessly risk giving a good deal of it back to the market (not forgetting 1.5% plus VAT to your firm) with the sole consolation that we could look forward to partying big-time once we got into our 90's.
The invitation to sign up was declined.
I had thought FSA regulations included something about advisors going thoroughly into clients' requirements as to risk exposure - maybe I dreamt that.
And maybe the guy's right about the market- who knows? I hope he is right as we'll all do very nicely - with or without his firm; time will tell. But as a technique for understanding a propective client's needs, winning confidence and gaining new business, suspect he'd be better off on a used-car lot - or maybe he was moved on from there? (Apologies to any reputable used-car salesmen).
