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Well, folks, between the fear of the Coronavirus (COVID-19) and the roller coaster of a stock market, life has really changed for us all in the blink of an eye. For some, it may be some minor inconveniences and for others, it could be a real punch in the face.
I initially wasn’t going to write a post on this because I figured that everyone and their brother are already on it. However, sometimes it’s good to hear different perspectives. Maybe I can lend a little sanity to an otherwise insane world.
Each of our lives is completely different. Some of us are working for an employer, some self-employed, and others unemployed or retired. While some have kids, others don’t. There are older and younger folks out there. And of course, we live in different areas in the world.
So yeah, one person’s take on this time in life can vary tremendously from the next person’s view. And that leaves some room for my perspective. I’m going to take you through some of my thoughts on this segment of life affecting us all.
Coronavirus / COVID-19
It seems like there were two major camps out there regarding the Coronavirus…
- Those who think it’s all hype by the media and consider it no more of a threat than seasonal influenza.
- Those who have battened down the hatches and are preparing for doomsday.
I’m not going to slam either of those approaches (to each his/her own), but personally, I tend to take it seriously but without going into panic mode.
Last month, I read a post from Bill Gates (yeah, that Bill Gates) he published on his blog on February 28, 2020. After that, I was ready to put a lot more weight on the COVID-19 pandemic.
“In the past week, COVID-19 has started to behave a lot like the once-in-a-century pathogen we’ve been worried about. I hope it’s not that bad, but we should assume that it will be until we know otherwise.”
If you’re not familiar, one of the cornerstones of the Bill & Melinda Gates Foundation is to combat infectious diseases. I’m always willing to listen to someone like him more than the mainstream media.
At that time, most folks didn’t seem to care too much about this virus. But now that it’s starting to quickly spread and has become a pandemic, eyes and ears are all over it. People are starting to realize just what a dramatic effect this is having throughout the world, both healthwise and economically.
No one knows how this is all going to play out and that’s part of the fear and uncertainty out there.
If you’re in a position where you’re still in disbelief about all this hype (it’s not), let me say this. In my ignorance, weeks ago, I thought the idea of everything going on was to try to stop the virus… it’s not.
I didn’t understand the idea of “flattening the curve.” The intention is to slow the virus as it spreads. It’ll still likely infect tons of people, but in a more manageable fashion where hospitals can keep up with those who really do need medical care. And that can cut the death rate down dramatically.
This article was what made me finally understand it: How canceled events and self-quarantines save lives, in one chart.
But I just read this article the other day (Why outbreaks like coronavirus spread exponentially, and how to “flatten the curve”) and I think it’s truly eye-opening. This can help us as a society understand the “why” of everything taking place right now.
Ok, now back to our show!
I used to have a room in the basement of our old house that my family lovingly referred to as “the dungeon.” I had shelves of food supplies that I would rotate out every time we’d go shopping. I also stocked a bunch of various supplies, bug-out bags, and totes all ready to go.
I wasn’t a full prepper and I wasn’t worried about a zombie apocalypse. However, I did want to be prepared for things like natural disasters or economic unrest/uprisings. You never know when something like the Northeast blackout of 2003 will occur where some areas didn’t have power for a couple of weeks!
The thing is, once a problem starts, it too late to start preparing.
— KPRC 2 Houston (@KPRC2) March 13, 2020
But, when we moved to Panama, we came here with two suitcases each. We also moved into an apartment without a lot of space. That meant that “the dungeon” doesn’t have a good place here. How funny that I had that going for years and less than a year after I purged everything is when it would have been the most effective!
Regardless, we’ve slowly been building up some basic supplies. There are some differences though when you’re living in a foreign country like Panama. For instance, I don’t have to worry about warm clothes being ready to go, but having enough cash on-hand to buy our way to another country in one way or another can be critical.
Besides some of these obscure things, my real focus was just having enough food (and beer!) on hand if we needed to self-quarantine. If this should happen, whether willingly or not, we could possibly be stuck for a couple of weeks or longer living off what we have on hand. It’s also feasible that grocery stores could shut down temporarily if this becomes big enough.
So, I headed to PriceSmart (our version of Costco) in David on Tuesday 3/10/20, which was maybe a day after the first coronavirus case made it into Panama. That turned out to be a lot more fun than I thought. Middle of the day on a weekday and it was still crazy jammed packed. Here’s a photo of the checkout lines:
I bet at least half to ⅔ of the carts I saw had a case of bleach in them. Now, I do get the idea of having bleach on hand to disinfect, but do we really need a case of it?!
My focus was on getting stuff that would last:
- Canned foods – vegetables, chicken, etc.
- Soups (pouches)
- Peanut butter/Jelly
- Fruit cups
- Nuts/Trail mix
- Olive oil
- Bottled water
- Beer (if I’m trapped in my apartment for a couple of weeks, you know damn well I’ll want a beer or two!)
In other words, I bought items that we’d eat regardless of whether there was a pandemic or not. I just bought more so we’d have a stock of items that hold well should we need it.
And yes, I did buy toilet paper. But I would have been getting that there anyway – not just because of the Coronavirus, but because it was time to get more.
The stock market
Oh, the stock market… the fun little stock market!
I actually get a little thrown off by selloffs. It’s not because I don’t get that people trade throughout the day. That’s normal and I also understand stock market adjustments to reflect company valuations.
I even get the big market slides. They will happen and a lot of folks jump on board and start selling as well to try to avoid being holding low-valued equities. I don’t agree with selling on the downslide, but I do get it.
What I don’t comprehend is how people continue to sell once the stock market is already down so much – like for days, weeks, or months after.
The herd mentality comes into play and people worry about losing what they have. But the market comes back… it always comes back. Ask Jim Collins – he’ll tell you:
But this time is different, right!!??
Every market drop feels like "This time is different."
Someday, if it truly is, nothing will matter least of all how you are invested.
— JL Collins (@JLCollinsNH) March 9, 2020
If you seriously want to enrich your life, take the time to read his Stock Series. It’s absolutely the best, most down-to-earth understanding of investing that I have ever read. Or if you prefer, he’s written an excellent book on the subject called “The Simple Path to Wealth”, which really puts his thoughts in order. This should be required reading for every single investor.
If you need your money soon (like maybe you’re nearing or already in retirement), why is that money invested in something that’s meant to grow over the long run? If you’re going to need money in less than 5 or so years, what the hell’s it doing in something as volatile as the stock market?
Anyway, in a bear market, many folks get scared. Others though see opportunity.
My grandfather (who retired at around 47 years old) used to tell me…
“When everyone’s running in one direction, you’re probably better off headed in the other.”
He was a stand-out intelligent man. He was also very proficient in the stock market. The guy studied companies emphatically and read all the documents most of us take a hard pass on like their prospectuses and annual reports.
He knew investing and did very well in the stock market.
That advice was also very wise. It reminds me of Warren Buffet’s quote from the 1986 shareholder’s report for Berkshire Hathaway where he said that their goal is to:
“[…] be fearful when others are greedy and to be greedy only when others are fearful.”
And guess what, folks – that time is upon us. They’re both right!
I’m salivating at this opportunity because I’ve never been in a position to have the financial flexibility and stock market understanding during a chance like this before.
I know that timing the market is a fool’s game so I’m being careful about this. I got lucky on the way up. In January, I rebalanced my portfolio which freed up around $17k.
I’m now watching my asset allocation in Empower (formerly Personal Capital) (which is perfect for easily seeing that instantly) and I started slowly buying in as the market was sliding down. I bought two batches of shares with that money:
- On 3/2/20, I bought 67 shares of VTI at $151.10 for a total of $10,123.70.
- On 3/10/20, I bought 48 shares of VTI at $142.00 for a total of $6,816.00.
I knew going into this that the market would likely continue to drop. My goal wasn’t exactly to time the market expecting to get in at the bottom (though that would be nice!). Instead, I just want to get in at a better price than what I think the market will reflect down the line.
Since then, I read Fritz’s post “The Benefits of a Bear Market” and chatted with him briefly via Twitter. After that, I decided to sell some of my bond funds. On 3/12/20, I sold 2,006.023 shares of VBIRX for a total of $21,524.63.
I’ve started to use that money to buy back even more into equities. As of today 3/13/20, I have a couple of limit orders in:
- 80 shares of VTI at $125.00 for a total of $10,000.00
- 85 shares of VTI at $120.00 for a total of $10,200.00
Those orders may have executed by the time you read this or they might not have. Either way, I’m cautiously buying in where I can… and hoping for some negative media hype to help the market move down to those numbers!
I’ll likely continue this process as the stock market continues its downhill trend.
Just a reminder, I’m doing what makes sense for our personal situation. We’re in a position where we’re not relying on any of this money for at least another 5 years. That gives us room for that money to *hopefully* grow over time.
Be aware that I’m also not touching any of our “bucket 1” money either.
Please don’t blindly follow in my footsteps. I’m not a financial advisor and your situation is going to be different. Talk to a professional for guidance. In fact, feel free to schedule a call with my financial advisor if you want. David from Remote Financial Planner has been a great asset to us over the past few years and I highly recommend his help.
Our Panamanian life during these times
Although a lot of folks are either pretending the Coronavirus isn’t a real thing or they’re preparing for the end of the world, we’re trying to stay a little more balanced.
As of 3/15/20, Panama has 43 confirmed cases and 1 death. Those numbers could have jumped dramatically by the time you’re reading this.
Just like the U.S., we’re seeing tons of shutdowns here in Panama as well. Some schools have been temporarily closed in the country and on 3/11/20, the mayor of Boquete mandated the suspension of activities or events involving gatherings of people.
And starting after 3/16/20, non-nationals and non-residents of Panama won’t be allowed to enter the country. Our plans for having visitors have pretty much been squashed recently.
In the meantime, we’re personally doing somewhat of a “proactive social isolation” as Joshua Sheets from the Radical Personal Finance podcast referred to it in his “Thoughts on COVID-19 Events du Jour” episode. We’re staying away from social get-togethers, restaurants, grocery stores, etc. for the time being and spending most of our time in the apartment.
That said, we’re in Boquete, Panama – it’s beautiful here! No need to stay cooped up inside all day, every day. Being outside shouldn’t be a problem if you’re keeping your distance from people. So we’re going to continue to go on our walks and hikes we love.
The only iffy part of this plan is going to the gym. I’m on a roll and don’t want to screw that up or I know I’ll just fall off the wagon. I’m still going back and forth on this one. It’s pretty rare that we ever have anyone in there with us in this awesome facility so that’s a plus.
And even then, we’re wiping down equipment, not touching our faces, and washing our hands before we leave. Once we get back home, we shower off the grossness of the gym.
Foolproof? Nah, not so much. But I’m ok with that. And if we do happen to contract the virus, hopefully, we’ll be able to keep it constrained to our family by moving from our social distancing to full isolation.
For now, though, I decided to work out in our apartment with my resistance bands and trying some other exercises. In order to just do what I can with what I’ve got though, I’m improvising a little bit…
If you don’t have one of these “kid things”, you should get one. They’re very handy for stuff like this!
Overall, I think we’ll continue to go to the gym but just less often for the time being.
As to the stock market, some folks are losing their minds by reading and watching the media all day long. I’m paying more attention than usual, but I’m looking from a different angle. I’m watching the breaking headlines just waiting for even more opportunities to buy.
We’re in an interesting place in all of our lives right now. As Clark Howard put it on a recent episode of “The Clark Howard Show”:
There are certain times, certain events that happen that override normal life and rhythms of life and we’re in one of those now with the fear that surrounds coronavirus.
This couldn’t be more accurate. This time in life is something so crazy and unusual for all of us – it’s got us all out of sorts.
We could ignore everything completely or we could freak out. However, neither of those options will help everyone get through this.
My thoughts are that it’s critical to think through what’s going on, understand what needs to be done, and then take some steps to protect both you and your family. You may have to adapt and make changes in your daily lives that are quite different than what you’re used to, but this only works if we’re all on the same page.
Hang in there, everyone – years from now this will all just be a distant memory that we share with the next generation!
Your turn… what do you think? Are you concerned about the Coronavirus or the stock market?