Financial advisors, did you ever notice that clients most often “check in” during big market selloffs, as opposed to when their portfolios quietly creep higher?
Advisors woke up Monday to find the S&P 500 and the Nasdaq set to open nearly 4 percent lower on the heels of a more than 12 percent overnight drop in Japanese stocks. The CBOE Volatility Index, or the so-called fear index, surged past 65 at the start of the day, more than 4 times the previous week’s level.
Rob Branch, certified financial planner at Prime Capital Financial, is also using the market’s dislocation to make a few moves. In his case, locking in interest rates on structured notes at levels far above recent yields in the 2 to 3 year duration space.
“We are able to rotate some of the higher cash and short-term bond levels that we have in their allocations due to the yield curve dynamics these past couple of years into tactical equity positions at better entry point and lower risk,” said Branch. “These are lemons into lemonade kind of days.”
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