Three things I learned from the 2008 Financial Crisis
Three things I learned from the 2008 Financial Crisis:
It was 2006 and I had landed my first job. Well, my first “real job” in my eyes; not that cleaning pools didn’t have its perks. I was working at a mutual fund company, in basically a customer service/educational role. If I’m being honest, I wasn’t sure if I would be staying in this industry or not. But it was a job and it allowed me to move out and go out, which was of prime importance in my early twenties.
My first year and a half or so went pretty smoothly. Did I learn? Yes, a lot actually. Mostly technical knowledge about investments, mutual funds, and the power of compound interest. I also acquired a strong client service base which proved to be a solid foundation for me in later years. But what was to come taught me lessons of far more importance, and lessons that have stuck with me to this day.
Most people can remember exactly where they were when certain catastrophic or significant events occur, but 2008 wasn’t like that. It was more a slow but steady, and ever increasing burn. I have scattershot memories of me in the office, talking to alarmed and anxious clients. Meeting after meeting with coworkers and leadership to address what was happening in the economy and stock market, and how we could continue to support the advisors and clients we worked with.
But what stuck with me most were the incredibly difficult and heartbreaking conversations I had with clients who were on the verge of retirement, only to have their portfolio cut nearly in half. Or worse yet, clients who had already retired and now weren’t sure if they could keep it that way. The uncertainty, worry and panic could almost be felt in the air.
At this point, I was not qualified or licensed to advise. Every single person I spoke to had an Advisor already. Where were they? Why weren’t they talking to their client? Why were some of these people on the verge of retiring and invested entirely in equities? What was the overall plan here?
Sadly, many of these people, not getting the calming guidance they needed from their advisor, moved every investment they had into cash, at or near the very bottom of one of the worst stock market crashes in American history. Did they ever recover? I can’t say for sure, but I fear many lost so much trust in the investment industry they never went back, and missed out on the multi-year bull market that followed.
But for every person I spoke to without a financial plan and with an advisor who they couldn’t reach, there were countless who did have a plan, a portfolio suited to them and their stage of life, and an advisor who was more than willing to talk them through this challenging period. And the difference that made was astronomical.
It was during this time where I truly saw what a career as a financial advisor is all about; or put better, what a career as a good financial advisor is all about.
I learned three things during the recession of 2008. I learned the value of a trusted advisor, the importance of a financial plan; and most importantly, that this career is not about flashing numbers on a screen. It’s about people’s lives.
Make sure you have these discussions with your advisor. Make sure you have a plan and that it gets updated; and make sure that no single market downturn can derail that plan.
Don’t have a plan or need some help with it? Drop me an email, and I’ll be happy to help.
Ryan Page
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
