Clients get panicky, especially during corrections such as the current one. They want to sell everything. Then sometimes they go to the opposite extreme—-they want to invest large amounts in risky, reckless ventures.

You’ll prevent that. You’ll stop your client from driving over the cliff, won’t you? Maybe not.

Indeed, advisors, not wanting to lose assets and relationships, sometimes cave to client pressure. They take actions they know, or should know, are wrong and will hinder long-term goals.

Those were some of the warnings of Timothy F. McCarthy, former president and COO of Charles Schwab Corporation and president of the Fidelity Investment Advisor Group. Hie is the author of a new book, The Safe Investor: How to Make Money Growth in a Volatile Global Economy.

McCarthy, in a New York City press conference along with book researcher CFA Daniel Kern of Advisor Partners, offered a few steps to prevent clients from self-destructing. These include allowing clients to make what might seem to be some reckless investments, the slice philosophy and having a diversified portfolio. McCarthy contended that many clients and advisors think they’re diversified based on the economy of a decade ago. But, given the growth of emerging markets, they aren’t. They are ignoring how the investing world has changed, McCarthy said.

“I was surprised to learn how inexperienced many American investors, and even some advisors were, as to what is really transpiring in the rest of the world.” He said it was a “shock” to see that foreign investors generally better understand that the demographics of the emerging economies provide a much better potential for growth.

The emerging economies, and some so-called emerging economies already growing at rapid rates, are essential for any investor who wants strong growth.

“And even when advisors know

should have that exposure, they run into the attitude of ‘I don’t trust those countries; they’re way too risky,’” he said. McCarthy believes emerging-market volatility can be reduced through investing in several countries. Emerging-market investing, he added, is a key element in obtaining good returns. That’s because countries with older populations tend to buy less than nations with young populations.

Investing only in Europe, the United States and Japan puts “dangerous” risk into your portfolio, McCarthy said. “The basket of growth countries will continue to grow over the next few decades, at times, twice as fast as developed nations. Some will also have stronger currencies and debt-service ability,” McCarthy writes.

Why the emphasis on not settling on the strong recent numbers in U.S. markets?

McCarthy explained that he still retains a large part of his portfolio in U.S. stocks, but the average investor needs to broaden his or her approach. Strong growth rates are important, McCarthy added, because many Americans, if they reach age 50 and have no major illnesses, are going to live 30 years or more in retirement.

“Our research shows that many investors are likely to outlive the funds they are investing in,” says Kern, president of Advisor Partners. They’re in bad funds that aren’t going to work for their long-term plans, Kern noted. So why do they stay with them? Kern argues that fund-industry marketing often derails long-term goals because investors end up buying the latest investment “toy.”

“Unfortunately, people want to own the fund that is at the top of the charts. They want to say ‘I own this fund.’ And it turns out to be yesterday’s shiny new toy. And often yesterday’s success becomes today’s walking dead.”

Besides diversification, another McCarthy recommendation for volatility reduction is to invest slowly and stay in the market over long periods. He notes that using the professional term to describe this strategy, dollar-cost-averaging, has spooked many individual investors. Instead, he calls it a “trickle-in, trick out” approach.

Long-term market exposure, whether in a build up or withdrawal phase, will pay off even in the worst of markets, McCarthy believes. One example cited in the book was the market meltdown of 2007-2008. The SP made an all-time high on October 11, 2007, just before the market tanked. Some five and half years later, in April 2013, the market again reached a new high.

“What trickle in, trickle out means is that you don’t have to worry about economic cycles,” according to McCarthy.

McCarthy also says advisors, instead of fighting with clients about dicey investments, should let them have a few nights on the town. Although clients should have the bulk of their money in long-term investments and cash, there can be a speculative part of the portfolio. He adds that they can have a trading pocket — a small part of their portfolio — in which they are free to trade risky investments.