No matter what the markets are doing or what the headline du jour screams, there’s always a seemingly “good” reason for investors to go to cash. The temptation is timeless, and usually wrapped in good intentions.

The Temptation to Go to Cash

As advisors, we tend to hear these concerns more when markets are falling and investors see their account values slip from prior highs. The brain interprets this as a threat, the threat of future loss or delayed goals, and screams “get to safety. ” For most investors, that means selling risk assets and moving to cash or bonds.

But this impulse isn’t limited to market downturns. Investors can also feel anxious when markets are rising to new highs, especially when headlines question how much longer it can last. The perceived threat is the same: loss. Even though they haven’t lost anything yet, they’re imagining future losses. The brain whispers, “Get to safety now before you lose your shirt. ”

The good news, no matter if clients are asking to go to cash when we are experiencing a sell off or all-time highs, your response is the same.

Say Hello to Loss Aversion

When a client wants to go to cash, loss aversion is almost always at play. There’s no need to tell them that. We aren’t here to define biases; we are here to guide clients to make the right decisions despite their biases.

Loss aversion is an emotional bias, and emotions don’t yield to logic. Yet most advisors instinctively respond with data, charts, or long-term returns. That’s understandable because our profession is built on analysis and reason. But emotion trumps logic in moments of fear.

What your client is actually feeling is fear, discomfort, and uncertainty. So to be effective, your job isn’t to erase those feelings, but to make the “go to cash” option feel even more uncertain.

3-Step Response to “I Want to Go to Cash”

Step One — Demonstrate gratitude.

Thank them for bringing this up before acting on it. They could have called demanding you sell everything, but instead they came to you first. Acknowledge and appreciate that openness.

Step Two —Validate their feelings.

Validation doesn’t mean agreement. It means empathy. Let them know you understand how they feel; that based on what they’ve heard or experienced, you can see why going to cash seems like the responsible move. If you’ve ever felt similar anxiety yourself, say so. That shared humanity builds trust and lowers defensiveness.

Step Three — Pivot to Perspective.

Now shift the focus. Going to cash may feel safe, but it actually introduces more uncertainty. Ask a few “what if” questions to help them see that risk:

  • After going to cash, if the market surprisingly goes up 15% what will you do?
  • Let’s say, despite the bad news, the market keeps heading higher and is now 25% higher than when we sold. What would you do then?
  • Finally, what if the expected pullback for you to buy in never happens and the market is now up 50% from when you sold. At what point do you realize the train has left the station and you aren’t on board?

Each scenario reveals how hard it is to time the market once you step out. The goal isn’t to win an argument; it’s to make staying invested feel like the path of least emotional discomfort.

Final Comment

Clients don’t go to cash because they’ve lost faith in markets; they go to cash because they’ve lost emotional comfort. When you restore that comfort through empathy and perspective, you not only preserve their portfolio… you strengthen the trust that makes every future conversation easier.