Gagne Wealth Management
Jay Gagne is more concerned with what he calls “headline risk” than he is with the cyclical ups and downs of the stock market.
Dusting off the History Books to Calm Clients Fears
“We wake up in the morning and the wrong headline is blasting across the TV. Suddenly the market reacts violently to the downside – and then clients are panicking when they really don’t need to,” he said.
That’s when Gagne, the managing partner of Gagne Wealth Management, an independent Raymond James firm located in Indianapolis, Indiana, takes an academic approach. He transforms from financial advisor to history teacher, going over the checklist of downturns, as well as national and world events that the stock market and the U.S. economy have survived.
His list includes World Wars I and II, the Korean War, the Vietnam War, the Democratic Party being in control, the Republican Party being in control, the assassination of President Kennedy, the credit crisis, rising interest rates and lowering interest rates, just to name a few.
“This market has been through everything,” Gagne said. “All we have to do is pull out the history book and dust it off to see how the markets reacted when a similar time approaches us today. We can look at how many months it took for the markets to recover – and what were the policy decisions that worked and what did not work.”
He gained this confidence because of a professional move he made in 2001, after earning the Certified Investment Management Analyst (CIMA) designation from the Wharton School of Business at the University of Pennsylvania. He believes earning this distinction changed his career by upping his game as a financial advisor.“My greatest success was that wake-up call in 2001 when I got the additional certification from Wharton and turned into a true professional by applying the principles I learned there to my book of business,” Gagne said. “I learned all of the things I did not know.”
The changes he made must be paying off. Gagne doesn’t have to prospect for clients; they all come via referral from the 220 households of doctors, physicians and others in the medical industry that comprise his current book of business. He noted that the average account size under his management is in the $1 million range.
Not only are Gagne’s clients high net worth individuals, but they are very educated and very sophisticated. Yet, even they experience a myriad of emotions when the market takes another spin on the financial rollercoaster.
“One of the things I tell my clients over and over again is that market turbulence is an eventuality and there is no way to avoid it,” Gagne emphasized. “But this is how we are going to handle it: If things get cheaper, we are going to stay put even more resolutely. I don’t know where the bottom is, I don’t know when things are oversold and I don’t know when things are overbought. What I do know is that downs are always only temporary and the gains made during the ups are always permanent.”
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