The stock markets have not seen losses like those we are currently experiencing since the Great Recession in 2008 and it is not clear when we will see the bottom of this selloff. The decline began in early March 2020 as a result of the Russian-Saudi Arabia oil price dispute. Fears over coronavirus (COVID-19) coupled with the oil dispute, accelerated concern in U.S. and global markets. On March 9, 2020, the three Wall Street indices (S&P 500, Dow Jones Industrial Average and Nasdaq Composite) lost more than 7%. The next day, the three Wall Street indices lost more than 9%, which was the largest percentage drop since Black Monday in 1987. During the month of March 2020, the Dow Jones Industrial Average has seen its largest drop (2,997 points) and largest gain (1,985) in history. Needless to say, we are currently living in a fast paced and volatile time for investors.
So … what happens if you lose a significant portion of your portfolio during these times? Your first call is likely to your financial advisor where you will likely be told to “stay the course” and “stick to the plan” or “the market will rebound.” While those clichés have some truth, the losses you have suffered may be the direct, or indirect, result of your financial advisor’s actions. No matter how you look at it, your financial advisor is in the business of making money. It is in your financial advisor’s best interest to tell you everything will be “ok” and to “ride out the storm” so he or she does not lose a source of income (i.e., you – the investor). The financial advisor’s survival is dependent upon keeping your account because the advisor can continue to profit off of your investments. However, the financial advisor might not be telling you that you lost more than you should have because the financial advisor failed to properly manage your account and failed to properly plan for a market downturn.
The vast majority of client calls we have fielded over the past few weeks revolves around the same few issues, namely: 1) over concentrated accounts; 2) suitability issues; 3) margin trading; and 4) the sale of structured products or private placements that are illiquid and cannot be sold on an open market. Many investors believe if they have lost money in the market, they do not have recourse against their financial advisor or the financial advisor’s firm. That is simply inaccurate. Based on your investment objectives and risk tolerance, the position your financial advisor placed you in may not have been appropriate. The financial advisor’s job, in large part, is to protect you from a market down turns and ensure you have a diversified portfolio based on your investment objectives and risk tolerance.
If you have suffered significant financial losses in 2020, please contact us to assist you in your investigation. Schwartz’s Investment Advocates handle securities litigation matters around the country. We are a nationwide litigation law firm that helps investors recover investment related losses. Our experienced attorneys aggressively pursue claims on behalf of clients who have been damaged as the result of negligence, fraud and misconduct by their financial advisors and brokerage firms. Investment related litigation is complicated and requires a specific skill set that most lawyers do not possess. Our skilled and experienced lawyers are here to help you recover your losses! Please contact us for a free consultation.