How does a financial planner answer this question? or change it to “market is rising, what should I do?”

It is really difficult, right?

Ok let me try. If he is an equity buff he is likely to say “Keep investing, in the long run equities are the best asset class and you will get the benefit of being in equity, especially in difficult times.”

If your FP is non-believer who is selling equity funds to you because the sales pitch is easy and the commissions are high, he is likely to say the following:

“Equities are good in the long run, so if you stay in equities for 2 years plus you will be rewarded. However when the market improves remove some money and put it in real estate or some debt products so that your ‘capital’ gets protected. In fact Sir, the Nfo in which you put Rs. 50,000 in 2006 is now worth Rs. 57,000 why do you not book your ‘profit’. I normally choke with emotion on a pitch like this.

If your FP is an Amway salesman he is likely to tell you: “There is no business like getting a few thousand people working for you. So become an Amway salesman – it is the best way to create an unearned income. Forget the impact of compounding in your equities. The compunded rate of growth of Amway is far superior to equities”.

If your FP has interest in real estate, he is bound to say: “What can you do with equities if the markets are down? Not much. However if you invested in real estate at least you can live in that. You can give it on rent. You can go for a weekend getaway…”

Ultimately the customer has to find a real financial planner who charges only for the time spent – and not doing any transaction at all. However most clients do not appreciate the language slant a product selling FP can use to make them buy the product that they want to sell. To me all such dialogues look like a street side card game. Ultimately you pull the card the magician wants you to pull!