Keeping emotions in check
While issues like this trade war may prompt some clients to insist their children need to go to school abroad, or make them want to buy their children a house to give them more financial security, Kim also tries to assess the extent to which these decisions are being driven by emotion. He has seen a correlation between clients who watch more news and clients who tend to show more sensitivity to negative headlines. While he encourages clients to stay current, he also emphasizes that they should take things with a grain of salt and root their financial decisions in the best rational approach.
That emphasis on the rational is best demonstrated when clients consider downsizing or eliminating their US asset exposures. While Kim is sympathetic to the patriotism of the moment, he reminds clients that too heavy a weight to the Canadian market leaves them deeply overexposed to certain sectors and underexposed to others. Broad diversification mandates a healthy exposure to the Untied States and he believes that no form of bad headline or bellicose rhetoric from the Trump administration should change that.
Kim has been emphasizing that message since the onset of tariffs at the start of 2025. Over the past 20 months he has highlighted the importance of diversification to his clients, outlining other risks such as the growing concentration in certain equity indices due to the growth of AI-linked mega-caps. By keeping these conversations about market realities and preparing for market or macro events, Kim says he’s managed to help ensure his clients’ emotions don’t drive their financial decisions.
Renewing efforts as the news turns bleak
Despite all that coaching and reason-rooted communication, Kim acknowledges that the latest flare-up in the trade war demands a renewed period of outreach. He is prioritizing communication with business owner clients, especially those with businesses impacted by the new tariffs. He’s also reaching out to clients approaching retirement or those who have recently retired. That period can be so sensitive and volatility spikes or poor decisions in those moments can have lasting consequences, so Kim believes that contacting those clients is key.
While younger clients tend to have the time horizon needed to manage these moments, Kim also accepts that there can be a tone of fatalism when yet another ‘generational’ shock occurs. While the response by some young people has been to participate in riskier activities like crypto and sports betting, Kim offers a dose of context. He reminds them of the ways life continues to improve, and demonstrates the power of compounding over time. With all clients, he emphasizes a need for perspective and a degree of reflection on how our own perspectives, and even our own aesthetic sensibilities, impact our reactions to global events.