Make Market Conversations Work for You This Summer

Be prepared to encounter investors with newfound optimism in the weeks ahead when you attend summer gatherings with friends and family. They might even be remorseful for sitting too long on the sidelines.

Here's how it may manifest during a first encounter with a prospective client, John, upon discovering you're a financial advisor:

"I’ve had a lot of cash on the sidelines. I’m thinking of putting it to work given how the stock market has recovered. What are you telling your clients?"

Your response may be what turns this first encounter into a follow-up conversation. Rather than debating a prospective client's view, create a curiosity gap by using a thesis—a timely, pithy sound bite that connects the dots between your foundational beliefs and the advice you give to clients.

Consider a timely thesis from Vishal Khanduja, head of the Broad Markets Fixed Income team: “Do not be lulled by today’s lofty markets.”

Ideally, John will ask you to explain the thesis, which opens the door for you to add a bit of nuance to their viewpoint. To help devise a response, below is additional context from Vishal.

• Our view is that the U.S. and global economies will likely decelerate in the second half of this year.
• Trade policy uncertainty will be a continual drag on growth and cloud the inflation picture.
• The outlook for the U.S. dollar has become challenging and the demand for longer-dated sovereign bonds is shifting.   

What have you accomplished with this conversation? You’ve showcased a professional's perspective that looks past the headlines. Your nuanced response may also cause John to become curious about your potential value and ask, “what do you think I should do with my cash?”

For the answer, we turned again to Vishal to see how he would respond:

“Don’t be fooled—there’s opportunity cost to cash. Today, investors should consider moving out of cash into flexible investment-grade bond strategies.”

Bottom line: Leverage the power of a well-articulated thesis to help turn first encounters into follow-up phone calls.