For the next 14 days I will be offering investment/financial advice at no charge. Feel free to text or email questions or we can set up time to talk by phone or Zoom. Please pass this along to family, friends and colleagues who may need some advice.
“If you liked it at a 1/2, you’ve got to love it at an 1/8” my boss on the New York Stock Exchange would often quip. I like to think it was his way of mentoring me. Steering me away from the emotion of loss, back to the rationale of why I was buying the stock in the first place. Getting me to think if that reason was still valid.
Now as the stock market has erased the gains you have enjoyed over the last few years, it’s time to ask if the reason you invest in the stock market is still valid. Is your time horizon still the same? Are your investments still long term? And ultimately why invest in the stock market in the first place?
The answer to the latter is that we aren’t investing in any particular business or strategy, as as much as we are investing in the system that allows us to enjoy and pursue the lives we have choose. Capitalism/democracy certainly has its flaws but its time to look beyond those and recognize its power to innovate, overcome obstacles and continue to produce better goods and services.
The Corona Virus will test the system, but we have already seen other countries’ start to “move back toward normal” as my friend in Shanghai describes. Whether it takes us longer or it happens sooner it will happen. There will be financial fallout, but your long term investments reflect the whole system and the financial backing of the government that supports that system.
If you’re afraid of the absolute worst case scenario you can be rest assured that money will be irrelevant, so you might as well stay the course with your investment strategy.
I think there is still bad news over the next weeks and months that the market will need to digest. But finding the bottom or choosing the ideal buying price is almost impossible so buying little bits over time lets the market determine the right price for you. And keeping some buying power handy outside of your emergency fund is always a good idea.
One of the talking heads this morning on CNBC said “when your going through hell keep going.” I cringed at its cliché-ness , not to mention he didn’t attribute the quote to Winston Churchill. But those words couldn’t be more appropriate.