Lisa Gray has been a wealth writer since 2001. She has been involved in the wealth management industry since 1988. She is the author of two bestselling books—The New Family Office and Generational Wealth Management.| Money Anxiety Index Can Help You Take The Pulse Of Your Clients' Advisory Needs |
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| Tuesday, June 05, 2012 12:50 |
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Did you know there’s a Money Anxiety Index? That’s right. It measures anxiety levels of investors in response to economic data releases. This index reached its highest point in June 2011 since the 2008 crisis with a reading of 99.5. Since then, it has been on a steady decline…until this month, exactly a year later, when it rose .4 to 91.1.
The index creators say that there has been a perfect storm of economic and market conditions contributing to the increase. Viewing investor anxiety against the backdrop of Fritz Meyer’s recent comments on A4A can clue you in to what your clients need most from you right now.
This Website Is For Financial Professionals OnlyInvestors are hearing nothing but gloom and doom as reported by the media and industry analysts and economists every day. Each report has to do with an economic indicator that covers one month—or two, possibly three if numbers have been revised. This is a short-term view. It’s one that should be taken in context with the investment strategy you have outlined for your client.
Do these short-term factors matter? Yes, in the conglomerate sense that they can be useful in tweaking investment strategies designed to achieve short-term goals. One thing you can do is to set up a monitoring system within your own practice. You might set a threshold of a certain number of indicators that turn negative and the types of indicators to which you should pay the most attention.
You might determine a definitive point based on the time horizons your client may have for reaching specified goals when you will suggest either a tweak in strategy or a more pronounced change.
The opportunities in bad markets and economies are always more pronounced than in good ones. Keeping your own eyes focused on the opportunity side of things will help you decrease your client’s personal money anxiety reading.
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