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I was recently talking with an advisor about a client who was uneasy about the latest conflict and the volatility that came with it. He reached out to me because effective client communication during periods like this matters. He wanted to get it right.
This client had seen strong portfolio growth, but believed a sustained downturn could impact his job. So the real fear wasn’t, “markets might go down.”
It was, “What happens if my income is affected and I need to pull from my investments at the wrong time?”
This wasn’t about going to cash.
It was about responsibility.
How much, if any, should be taken off the table; how to balance growth with a buffer for the unknown.
What Changed the Conversation
The advisor didn’t rush to reallocate. We talked through a few ways to approach it, and he walked the client through what he actually owned, and why.
One detail stood out.
The client owned a meaningful amount of dividend paying investments. So the advisor showed him exactly how much annual income those holdings were generating.
The client had no idea.
Most of his assets were in retirement accounts, the income was being reinvested, and there were no clear reminders.
When he saw the number, everything shifted.
He realized he had a potential income stream. That he could rely on dividends without selling investments at depressed prices.
His perception of risk changed.
Not because the portfolio changed, but because his understanding did.
The conversation moved from “Should we get more conservative?” to “What is the least we need in cash and bonds to create a buffer so I don’t make a bad decision later?”
That is a very different conversation.
The Opportunity Most Advisors Miss
Most clients aren’t trying to go all in or all out.
They are trying to be responsible. They want to prepare for difficult scenarios while still participating in long term growth.
What stood out to me was how powerful it was to explicitly show the income being generated inside the portfolio.
Dividends and interest are far less volatile than prices. When clients see that, it gives them something stable to anchor to.
Financially, it creates options. Psychologically, it creates confidence.
And that combination leads to better decisions.
Related: Owning Stocks Is a Privilege. Volatility Tests Whether Investors Keep It