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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.

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