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For Jonathan DeYoe of Berkeley, Calif.-based DeYoe Wealth Management, which manages $250 million, keeping clients calm isn’t just about preventing panic during market downturns — it’s also about managing excitement when stocks are on a tear.

To achieve this at his firm, he and his colleagues stress the importance of context. “Clients tend to believe that today’s or this month’s performance matters a great deal,” DeYoe says. But he knows these short-term movements matter little to investors’ long-term financial goals.

To keep clients thinking about the big picture, DeYoe uses every opportunity to bring in historical context. Reminding clients that markets have gone down by greater than 20% every five or six years since World War II helps put a swing in either direction into perspective.

DeYoe also reminds clients he’s invested right alongside with them. Letting his clients know he’s putting his money where his mouth is gives his words of reassurance more credence. “We feel the same feelings as our clients,” DeYoe says. “We take our own advice. And we let clients know that while it’s okay for them to feel the feelings, it isn’t a good plan to act on those feelings.”

Full text of article available at Financial Advisor IQ