There’s room for guarded optimism. It may be hard to imagine the market recovering after the speed of this decline, but it will happen…eventually…in time.

And the track record is there.

Every stock market crash in the U.S. recovered. Every recession in this country turned into a growing economy. Every bear market ended. So guarded optimism.

If you’re sitting on cash, waiting for a signal to go all-in in this market, you won’t find it. Those things only show up in the rearview mirror. At some point, you have to pick your moment, commit to it, and average in.

Break your cash position into chunks, and buy some stocks each week or month — whatever you’re most comfortable with — until it’s gone (if your income allows it, now is a great time to increase retirement savings). That way, if you’re wrong about the bottom — which you will be — your money goes further. You buy more shares as stock prices fall. Continue Reading…

There are decades where nothing happens; and there are weeks where decades happen. – Vladimir Lenin

If you feel like the last few weeks have lasted forever, you’re not alone. Here are my thoughts going forward.

The administration’s reaction to the virus was nonexistent until the market slapped them upside the head. They finally appear to be taking the coronavirus seriously. Everyone else must follow suit if they haven’t already.

Right now, I’m watching for two things.

First, is an increase in mass testing for the coronavirus. That means an abrupt end to social media posts about people being turned away from the ER or doctor’s office because they don’t meet the “requirements” for testing. This has been a horrendous failure of the administration so far.

South Korea has shown the impact mass testing has on slowing the spread of the virus. They set up drive-thru facilities with next day results by phone. They’ve tested over 270,000 people so far,  roughly 4,100 tests per million people (while the U.S. was at 26 tests per million people). Continue Reading…

What a week! The range of emotions felt over the last four days must stretch from kid in a candy store to panic attack. I’m guessing, for most people, the candy store sensation is absent.

But some of us feel it. And it’s just as hard for opportunity seekers not to act rashly as it is for panicky investors. That dopamine hit after every buy order clears can be just as addicting…until you’ve burned through the cash set aside for times like these.

Patience and discipline are just as important for opportunistic investors as it is for everyone else in extraordinarily volatile markets.

As the saying goes, the best time to buy stocks is when things seem bleakest. I don’t think we’ve reached that point yet (nor do I know where it is).

But some time, like five years from now, few will remember how they felt and reacted during this crash but everyone will agree it was a wonderful buying opportunity.

My suggestion: write it down! Continue Reading…

Out of all the 2020 market predictions, nobody suspected a virus. The future can be unpredictable like that.

But that’s why a plan is so important. Your investment plan may not have foreseen what would hit the markets, but it should have prepared you for a hit of some kind.

As we’re finding out, Mr. Market can get wild at times. While the S&P 500 is down 10.8% from its 2020 high, it’s only down 6.4% on the year. That brings it back to the same level it was at four months ago — November 2019.

If it feels worse, it’s because the fall happened so quickly. Seven trading days, and a 12.8% decline, separate the February 19th high from the February 28th low.

And it’s been highly volatile since. So far, March saw the S&P move: 4.6%, -2.8%, 4.2%, -3.4% over its first four consecutive trading days.

Of course, that only tells part of Mr. Market’s story. What about the stocks inside the S&P 500? Just because the S&P is down doesn’t mean every stock in the index is down (it’s a convenient example of the benefits of diversification in times like these). Which happens to be the case YTD: Continue Reading…