If your
clients are feeling a sense of déjà vu as we start off 2020, they may have good
reasons for it.
Markets
at the beginning of the year are mimicking markets at the start of 2018. In
both of those years, markets came off a strong year-end from the previous year.
So how can you set your client up for success in the current economic climate?
Steve
Frazier of Frazier Investment Management, Wakefield, R.I., told
InsuranceNewsNet that 2019 “was a reset year” after a significant market drop
in the second half of 2018 and the Federal Reserve reducing interest rates
three times during 2019.
Despite
fears of a market crash from the U.S. trade war with China and conflict in
Iran, Frazier said, “it was just a blip on the screen at the end of the day.”
The
next thing to watch out for, he said, will come from earnings guidance issued
by major companies in February. And then watching out for whether the Fed will
make another change to interest rates this year.
“It
doesn’t appear that the Fed will be interested in making any move, especially
because inflation is still below their target,” he said.
Frazier
suggested that clients should consider protecting some of the gains they earned
during the market surge of the past year by moving them into a safer product –
an insurance product.
“Both
the bond market and the stock market are close to all-time highs,” Frazier
said. “This would help protect clients from volatility.”
2019
was “a do-over year,” in terms of the market, Frazier said. “But do-overs
don’t last forever.”
Susan
Rupe is managing editor for InsuranceNewsNet. She formerly served as communications
director for an insurance agents' association and was an award-winning
newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her
on Twitter @INNsusan.
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