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The Top Questions Investment Advisors Are Getting Asked Right Now

Worth asked RIAs and financial advisors what they’re advising their clients to do right now. Here’s what they had to say.

What Sectors of the Markets Are You Rotating To and From?
“We’re rotating to the sectors of technology, health care and consumer staples,” says Brian Holmes, president and CEO of Signature Estate & Investment Advisors. “These are sectors that not only have strong balance sheets but are in strong demand during this current bear market.”

“The sectors we are rotating away from are energy, financials and commercial REITs,” Holmes says. “Energy will suffer from leveraged balance sheets and a lack of demand for the foreseeable future. Financials will be hurt by a prolonged period of next-to-zero interest rates, and commercial REIT’s will suffer simply from lack of demand in retail brick and mortar businesses.”

When Is This Going to Be Over, and Is There Anything We Should Be Doing in the Market?
“The first step in addressing that question is really just taking a step back, looking at the big picture, reassuring clients [that] we’ve built a portfolio specifically to address their needs and with the foresight that we would experience these types of corrections, and that we will get through this,” says Eric Pritz, senior partner at Signature Estate & Investment Advisors. “And the key to that is building a bucket strategy where you have a portion of your funds in stay-safe, keep-you-rich assets—typically bonds, core real estate, things of that nature. That bucket is designed to provide for the next three to five years for cashflow needs, which we analyze when we meet with clients initially. We prepare that bucket to be there for them in these times of crisis, and so if we can explain to clients ‘Hey, you’ve got safe money that isn’t following the daily swings of the market and you don’t need to tune into that negative news cycle and scare yourself with the constant media bombardment on your smartphone. That safe bucket’s there for you now, and we expect the riskier growth bucket will be back in five years and hopefully sooner.’ That usually allows them to detach from checking their account daily and eases their initial fear and mindset that something drastic and reactive must be done.

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Opinions expressed here are the authors’ and do not necessarily represent the opinions of SEIA. Securities offered through Royal Alliance Associates, Inc., member FINRA/SIPC. Investment advisory services offered through SEIA, LLC, 2121 Avenue of the Stars, Suite 1600, Los Angeles, CA 90067, (310) 712-2323. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc. (CA Ins. License # 0657377 Brian D. Holmes and # 0E55966 Eric Pritz).