Every decade, media pundits and commentators struggle for the right term to encapsulate a decade — such as the Roaring Twenties, the Dirty Thirties, etc.

I am offering up my own poetic moniker for the next decade: the Troublesome Teens. We will face some difficult periods through to 2020, and I expect your clients will be relying upon your guidance more than ever in the years to come.

We are living in paradoxical times. Out-of-control consumer spending had brought about the recent financial crisis. Now, out-of-control government spending is the short-term solution to Europe’s sovereign debt crisis, but it also prolongs the mess.

Investors are in an anxious mood. On May 6, a computer error triggered a staggering sell-off in U.S. equities. The Dow Jones industrial average plummeted by almost 1,000 points in less than an hour — the largest intraday drop in the history of the U.S. exchange.

And a volcano with an unpronounceable name — in Iceland, of all places — brought commerce in Europe to a halt.

There are also deep fears that Greece’s troubled economics will derail the tentative growth in the U.S. and Asia.

The good news? Canada is in solid economic shape compared with the fortunes of other G8 countries. Our commodities are in demand, the loonie is strong and interest rates will rise at a snail’s pace.

The U.S., Europe and the developed economies of the West are entering a decade of slow and steady growth. The emerging markets are likely to be the source of major future gains — and higher risk and greater volatility.

As time marches on, the markets’ accelerated performance throughout much of the 1990s and 2000s will be remembered fondly as “the good old days.”

It’s a challenging time to be an investment advisor. Clients want answers and solutions and, yet, may be unwilling to follow your advice. They will also want to secure income growth for retirement but, at the same time, preserve capital and limit risk.

There are no safe bets in volatile markets. But I know one thing for sure — good financial advisors will earn their keep in the coming decade. Smart investors will defer to the experts. So, it’s your moment to bring stability, balance and strategy to your clients’ investment portfolios.

Here are some points to consider when talking to your clients:

> Take Calculated Risks. If a client can’t afford to lose money on a higher-risk investment, then he or she has no business making the investment in the first place. Never wager the health of a portfolio on a single investment.

> Stay Diversified. It’s important to maintain a healthy mix of diverse equity and fixed-income funds as well as securities that meet long-term needs. That’s because predicting which asset class will post the strongest returns in any given period of time is virtually impossible.

> Think Long Term. It’s important to stick with investments that meet long-term objectives. Frequent changes to the portfolio can be a recipe for disaster.

Chasing the next hot stock is a mug’s game. Odds are that you and your clients will pay top dollar for a stock or fund at the peak of the market — just in time for a decline. IE



Don Reed is president and CEO of Toronto-based Franklin Templeton Investments Corp.