American business author and former management professor at the University of New Orleans, Michael LeBoeuf, reminds us of something that most of us intuitively know:
Our goal is to create a customer service culture that produces not just happy clients but raving fans. People who are not only loyal to our business, but become brand ambassadors, referring others to Impel Wealth. They want to see their friends and loved ones helped in the same way they have been. In my opinion, this is the ultimate measure of client satisfaction.
We all know that uncertainty and volatility create both anxiety and dissatisfaction. We can observe this plainly in the sentiment poll from the American Association of Individual Investors, AAII. As you can see in the chart below, a recent reading showed bullish, or optimistic, sentiment of only 15.8%.
Surprisingly, this was the lowest level since September 1992!! Think about everything that has happened in the last 30 years. This would include the dot.com bubble, 9/11, the Great Financial Crisis and the Covid-19 coronavirus outbreak, to name just a few. And yet, recent sentiment was lower than during all those previous crises.
It seems that the combination of rising inflation, which is pushing prices significantly higher on food, fuel, and most things we buy, along with rapidly rising interest rates, geopolitical uncertainty, including Russia’s invasion of Ukraine, and the upcoming midterm elections, is creating a great deal of anxiety among Americans.
An additional poll conducted by Morningstar and Gallup as of 3/31/22 also shows a very low level of satisfaction here at home. The percentage of Americans who are satisfied with the way things are going in the United States is at a historically low level, on par with the crises outlined above.
What may be very surprising for most people to learn is that optimism and satisfaction surveys are often contrarian indicators. In the chart above, you can see that the highest level of satisfaction came in February 1999 when the economy was humming along, we were creating budget surpluses, and the stock market was going gangbusters. However, returns in the stock market over the next 10 years were very disappointing, as we lived through two stock market drops that both exceeded -45%.
As you will note in the chart, when the number of people satisfied is below 34%, which we clearly are now, stock market returns over the next 12 months, as measured by the S&P 500 index, tend to be an excess of 15%. While there are no guarantees, as past performance does not predict future returns, this gives us some reason to look towards the future with greater optimism than what we are sensing in the markets, the economy, and the country today.
We thought this was important information to share. Sometimes pessimism and dissatisfaction lead people to sell at the wrong times in an effort to reduce the risk. Oftentimes, this has led to people missing out on the rebounds that occur, thereby, compounding the error, and the impact on their financial resources.
We want to help you keep things in perspective and give you a reason for hope in the future as we continue “Moving Life Forward”. We will leave you with two other quotes about customer satisfaction that we believe are aspirational. The team at Impel Wealth Management hopes to achieve these goals for you, our trusted friends, and clients.
© 2022 Jesse Hurst
The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.