We’re under quarantine these days. We’ve been told to shelter “in place.” So we are home. This means we venture out for almost nothing. Stay home means don’t go out.
Another meaning
There’s an old saying in the form of a joke. The stock market is the only business where, when the products go on sale, everyone runs out of the store. (I am indebted to Ben Carlson for reminding me of this “joke.”)
My View
Scary times? Yes. And yet…
What Is Primary?
The primary purpose at this point is to stay healthy. There have been many deaths and infections from the current virus pandemic. Nothing should take precedence over one’s health.
Beyond Today
Sometimes it seems absurd to think about life post-virus. Survival is now up front and center at this point. Nothing matters if we do not survive. It is tragic beyond comprehension how many lives have been destroyed, finances shattered, careers dashed, hopes and dreams stalled. I would think the stress level of most everyone is much higher than in “normal” times.
And Yet…
During a raging war, there are those tasked with planning and even organizing what a post-war era should look like. So in the midst of life and death struggles, others are thinking and preparing for the world after the war. And so it is happening now as well.
Financial Life
In many ways, the shelter in place order itself has diminished spending. It’s true for us, too. While we have the normal ongoing home expenses, there are many expenses that have declined or been eliminated. With almost no driving, we are using almost no gasoline. We have ordered food to be delivered, so that is an expense, but so far our shopping has been far less than normal. Many industries have been worse than decimated; for example, travel and hospitality have all cratered.
After Life
When (I hope there’s not an “If” here) the corona virus situation subsides, it will take time for the economy to resume anything like normal. I am not the first person to say that it will look different than before. Some companies will not survive. Others will do well. But it is damned hard to see clearly what will and won’t happen.
As a dividend investor, my goal is to grow dividends for income. So stock prices interest me from the point of view of affordability to increase my dividend income. The recent gyrations and declines in stock prices have been attention-getting to me, and for everyone.
Those that are doing the panic selling (and buying) seemingly are those that attempt to show better outcomes than their peers. I am not in competition with anyone. I don’t need to show a larger increase or a smaller loss by the end of the quarter. Let those that feel a need to run in circles, scream and shout do so to their hearts’ content. Knock yourself out is what I would say to them. I am not them, and they are not me.
This virus-induced crisis, financially, similar to the Financial Crisis, has the opportunity to destroy a lot of wealth. Selling now means to lock in losses. Don’t destroy your wealth.
Certainly, it is a scary time. When I think about the long view, lower stock prices seem a perfect time to buy. Here’s my view on why that is true.
Have you done any market transactions in the last two months? Will you? Comment here.
The postcard illustration of lower Manhattan, NYC, from 1914, was published by the Success Postal Card Company. Courtesy New York Public Library.
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