By: Andrew Rosen, CFP®, CEP®

Week two working from home is a little different than week one. I’m no longer wearing sweatpants and working from my bed. I setup an office in my basement with a little desk to feel more professional and I haven’t shaved, which is a harsh reminder of my facial hair. (Laugh with me folks.) My facial hair is a social experiment gone bad. Soon, my children will riot and I’ll be forced to end this experiment.

But I do wonder, how is your work from home experience going?

Alright… to the topic at hand—the 4 types of investors in a market selloff. I started this business in the throes of the tech bubble and by the time that was over, we faced the mortgage and financial crisis of 08-09. And now, we’re faced with my third true test—the Coronavirus pandemic.

During these times of uncertainty, you get a real look into a person’s investing soul. You get to see how they react to adversity. My job, of course, is how to handle each person’s unique behavior as it pertains to their specific situation.

Below, I’ve identified the 4 different types of investors during times like these.

  1. Calm Carly- The Calm Carly represents the biggest demographic of individuals during times like these. They have been here before and recognize this too shall pass. Calm Carly knows markets do this every so often and realizes selling now and trying to time things rarely works out. She feels comfortable with her plan.
  2. Hiding Henry- Hiding Henry is the next largest demographic. This person, like Calm Carly, doesn’t sell, but the main difference is Hiding Henry realizes ignorance is bliss. They know their stocks are down like the rest of the world and instead of getting upset, they refuse to look at things during these times. Generally, I don’t dislike this approach (and even do it myself to some degree). The only caveat is if you don’t have a solid financial plan, this approach can expose a lot of weaknesses that could have otherwise been avoided. 
  3. Opportunistic Ollie- Good ole Opportunistic Ollie maybe my favorite of the four personalities. This person sees danger and runs to it. Not only are they OK with the volatility, but Opportunistic Ollie sees an opportunity waiting in the wings. They shift more aggressive or take money off the sidelines to “buy, buy, buy.” He recognizes markets will go back up and wants to utilize this as a good opportunity. I am also OK with this approach, as long as these people understand the short-term risks and the long-term payoffs. As long as that is understood, Opportunistic Ollie can thrive.
  4. Selloff Sally- Thankfully, Selloff Sally represents the smallest demographic. That said, she is out there. She sees nothing but a doomsday outcome, has a hard time dealing with the market swings, and becomes very emotional. Most of the time, I can calm Selloff Sally down and remind her of the superior financial plan we’ve put together. I tell her, “We will get through this.” Sometimes, however, I have to let Selloff Sally win for her sanity. Obviously, I don’t like seeing this, as I know the long-term impact of her decisions. But, in the end, she has to sleep at night.

Whoooooooooo are you? Tell me who are you?

(Did you hear Roger Daltrey, too?)

So, are you a Sally, Ollie, Henry, or Carly? Are you a little bit of a few? The key is, you’re not alone. The big differentiator, though, often is how prepared are you and do you have someone like Diversified, LLC to guide you through these times? Having that outside expertise and perspective is crucial during these times, more than ever. It doesn’t matter if you’re a Sally, Ollie, Henry, or Carly, we’re here for you, and we will continually do everything in our power to guide you through.

In his role as Financial Planner, Andrew forges lifelong relationships with clients. He coaches them through all stages of life and guides them to better achieve their life goals. Andrew loves helping others by spreading his knowledge on finance, investments, and the pursuit of happiness/fulfillment. He writes nationally recognized, weekly blog posts on these topics and is a regular contributor to Kiplinger. Andrew has been published in The Wall Street Journal, Barron’s, Financial Advisor Magazine, US News & World Report, USA Today, CNBC, along with many other publications.

For more information or to book a consult with Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

Andrew Rosen, CFP®, CEP®
Kyle Hill, CFP®
David Levy, CFP®

Financial planning and Investment advisory services offered through Diversified, LLC, a registered investment advisor. Securities offered through Securities Service Network, LLC, Member FINRASIPC. Some associates of Diversified, LLC are registered representatives of Securities Service Network, LLC, a registered broker/dealer, 9729 Cogdill Road, Knoxville, TN 37932. (800) 264-5499.