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Illustration: Sarah Grillo/Axios

As the financial markets swing wildly, investors are calling their financial advisers in droves, trying to figure out if they should buy or sell.

Why it matters: Fear of the coronavirus — and its impact on the economy — is prompting people to want to "time the market," which brokers say is a bad idea.

  • "Concerns have risen to their highest level," Chris Hyzy, chief investment officer for Merrill and Bank of America Private Bank, told Axios.

What's happening: The recent lurching stock market — which has seen some days with the biggest drops and surges in a decade — has flummoxed everyone from young 401(k) holders to affluent private banking customers.

  • Financial advisers universally preach investing for the long term. But they're being swamped by clients who think they should either unload their stocks or "buy the dip."
  • "We are experiencing a significant increase in questions, and a significant increase in communications out to our own investors and clients," Hyzy said.
  • At the same time, we're seeing "the highest level of uncertainty" and of "imperfect information," he said.

At the Wells Fargo Investment Institute, a subsidiary of the bank that has been holding daily phone calls for clients about market volatility, the volume of questions has gone from a handful a day a few weeks ago to 60 on Thursday, Paul Christopher, head of global market strategy for the investment institute, told Axios.

  • Questions include "Where's the bottom? What should I do? How worried should I be? Is this a recession now? Is the end of the bull market upon us?" Christopher said.

Many advisers are being proactive, reaching out to customers to tell them not to panic.

  • "They need to get information about what's currently happening, not only in the news and in the markets, but from our perspective," Beth Norman, a financial adviser at RBC Wealth Management, told Axios.

Some investors may have seen it all before. "Unlike previous market corrections and bear markets, we've actually experienced fewer inbound calls," Andrew Crowell, an adviser at D.A. Davidson who's advised clients since 1995, told Axios.

  • "Are they worried? Some," Crowell said, noting that a retired client reached out to him last week asking to move all of his money out of the market and into cash. (The client ultimately did not.)

Advisers warn against the "herd mentality" and use historic examples to show the benefits of holding positions for a long time.

  • "People have a tendency to want to know where the bottom is, and you can't really tell them that," Christopher said. "But you can say, 'Well, here's what we're watching.'"
  • Right now, he added, "We're not calling the bottom, we're only saying that there are some signs that are emerging that suggest that the bottom may be near."

On the plus side: The turbulence has been a wake-up call for some investors. They've begun working with their advisers to rebalance their portfolios — updating the mix of stocks, bonds and cash, and culling stocks or funds that are underperforming.

  • "The diversified investor is seeing the diversification strategy pull through in times of stress," Hyzy said.

Among Vanguard's customers — who are largely self-guided — more people have been moving into equities than fixed income, and trading volumes have been relatively low.

  • "Approximately 1% of U.S. Vanguard households traded each day over the last two weeks (Feb. 24–Mar 12); a typical day is 0.4%," Vanguard spokesperson Amy Lash told Axios.

The bottom line: Even investors who sweated out the financial crisis may have forgotten how bad things got then — or they may be retired now and staring down a dwindling nest egg.

  • "We've been advising our clients to keep some cash to the side so that they're not obliged to sell in a market like this for income or for their expenses," Christopher said.
  • Advisers are reminding people that patience is a virtue. "The virus isn't going to last forever, and people will get back out and shop," he added.

Go deeper

SEC debunks conspiracy theories about meme stock mania

Photo: Alessia Pierdomenico/Bloomberg via Getty Images

The SEC issued its long-awaited report on the meme stock mania, which downplayed the narrative that a "short squeeze" was the primary driver behind GameStop's historic stock moves — and shot down conspiracy theories about the event.

Why it matters: The postmortem was highly anticipated, largely because of what it could hint about what the regulator thinks should be done in wake of the saga. But the report stopped short of specific policy recommendations.

Breaking Biden's diplomatic logjam

Expand chart
Data: Center for Presidential Transition via Congress.gov; Chart: Will Chase/Axios

The logjam for reviewing and confirming President Biden's ambassadorial picks is finally starting to break.

Why it matters: Biden is far behind his predecessors in the rate at which his ambassadorial picks have been confirmed. The Senate Foreign Relations Committee will hold a series of high-profile hearings and votes this week to finally begin chipping away at the backlog.

1 hour ago - Politics & Policy

Democrats brace for staredown over paid family medical leave

House Ways and Means Committee Chairman Richard Neal. Photo: Win McNamee/Getty Images

Senior House Democrats are braced for battle with the Senate over whether paid family medical leave — a key priority for progressives — will be included in President Biden’s final budget reconciliation bill, lawmakers and aides tell Axios.

Why it matters: Sen. Joe Manchin (D-W.Va.) has indicated he wants to cut the program to reduce the bill's price tag. “Paid family and medical leave must be in the final package,” Rep. Richard Neal (D-Mass.), chairman of the House Ways and Means Committee, told Axios on Monday.