My 2¢ on the Coronavirus, Stock Market, and Other Fun


Disclosure: This post contains affiliate links and we may receive a referral fee (at no extra cost to you) if you sign up or purchase products or services mentioned.


My 2¢ on the Coronavirus, Stock Market, and Other FunWell, 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.

And finally, here’s a good interactive resource on keeping track of the infections and death rates throughout the world.  There’s also a separate mobile version here.

Ok, now back to our show!

 

Our preparation…

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.

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:

My 2¢ on the Coronavirus, Stock Market, and Other Fun - PriceSmart Lines
Click to see a larger image. I took this once I had moved up quite a bit in line.  Note that lines formed on both sides of the store as well… ugh!

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.
  • Pasta/sauces
  • Soups (pouches)
  • Peanut butter/Jelly
  • Fruit cups
  • Nuts/Trail mix
  • Cereals
  • Snacks
  • 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:

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 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.

My 2¢ on the Coronavirus, Stock Market, and Other Fun - Jim, Faith, and Lisa on a Hike
Look at the view on our last hike… how could we just let this go by the wayside?!

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…

My 2¢ on the Coronavirus, Stock Market, and Other Fun - Bench Presses with Faith
Bench presses…
My 2¢ on the Coronavirus, Stock Market, and Other Fun - Leg Exercises with Faith
Some improvised leg exercises…

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?

 

— Jim

22 thoughts on “My 2¢ on the Coronavirus, Stock Market, and Other Fun”

  1. “…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…”

    Oh man, I hope you don’t hold me accountable for the results! If so, you may make ME do some pushups with YOU sitting on that chair….

    1. Haha, this was all my doing – no need to worry about feeling accountable… the market’s always goes back up eventually, right? This time’s not going to be any different.

      And yes, worst-case scenario, you can drop and give me 20! 😉

  2. Hi Jim. Thanks for your calm thoughts and insights, and humor! Your daughter Faith is awesome! What a great sport she is, to live this adventure with the two of you, and now to fill in as gym equipment! 😄

    My husband and I mostly have been thinking of the virus prep as panic buying, especially the toilet paper hoarding 🧻, but of course felt compelled to make sure we were stocked up too. 😏 But as more serious measures like school closures are taking place it’s starting to get worrisome, so it’s helpful to hear about your thought process and what precautions you’re taking, a voice of reason, thanks.

    On the other hand, please be careful about moving your asset allocation too much into equities. I actually also had a chunk of money (from a home sale) sitting on the sidelines that I put into a Vanguard total stock fund on 3/10/20, thinking it would rebound quickly, a no-brainer – which it did, just before it continued to drop. So I understand the temptation and motivation, but what if it doesn’t play out the way we expect? Or takes toooo long? My initial thoughts were that everything would bounce back quickly once the whole virus thing got handled, but now with all the mandatory business disruptions, what if the economy is really damaged and this becomes a bigger deal? Yes, eventually it will recover, but when? Did I make a classic investor goof by not staying the course and letting it ride with my existing asset allocation? Or can constant ‘rebalancing’ into equities justify the lump-sum investment? Just rhetorical questions, as I too don’t plan on needing to use my stock portfolio for 10 years, so should work out fine in the long run. Still, there’s a fine line between taking opportunities and gambling, so please be super cautious and intentional in moving away from your safer assets.

    Thanks for sharing your journey and your lovely family, truly inspirational!

    1. Thanks, JT – appreciated the kind words! Every investor needs to make well-thought-out decisions that they’re comfortable with and it will be different for each person’s situation and finances. So I definitely wouldn’t advise others to do what I’m doing unless they completely understand the risk first.

      For me though, I’m actually very comfortable with our holdings. Yes, it may take a long time to come back, but I feel the risk is worth the reward. Besides our 5-year buffer of cash and bonds, we also have income from our rental property helping to steady the ship. In the meantime, I do hope to start building up additional income from this site and maybe other endeavors.

      And if things seem like they’re slow to recover, we’ll make adjustments as needed along the way. Cutting back on living expenses or getting part-time jobs should be able to help carry us as needed.

      Thanks for your thoughts – very much appreciated!

  3. “You know it’s time to sell when shoeshine boys give you stock tips.” – – Joe (rumrunner) Kennedy…..Winter of 1928.

    The one and only post high school business class I took at Lorain County Community College – in 1971 – is when I head that. The guy that said it also said, “My goal in life is not to have a million dollars, it’s to owe a million dollars. About a dozen or so years later, I ran across his name somewhere & it mentioned he filed for bankruptcy. I don’t know if he owed a million or just went bust. Anyhow…
    I know little to nothing about the market & I desire to remain ignorant of it for the rest of my life.
    I’ll leave the “Bear and Bull stuff to you guys that know what it means.

    On the other front – my laptop went belly up & I had to get a new one. The hard drive or the hard drive controller is shot on the old one. I’m going to pick up a USB drive for it & install Linux on it & teach myself about Linux. My Unix is so rusty & don’t even recall 99% of it. I’ll pass the shutdowns that way I reckon…..

    1. Haha, the stock market can be a scary place. You’re a smart man by owning a lot of rental properties and focusing your wealth there. It’s definitely got its own set of headaches but there’s something about owning something tangible and actually directing the ship that gives you the power to control a lot of your income.

      I’ve been learning more than I expected about Linux with most Chromebooks ability to run it. It’s actually really cool and adds a lot of missing functionality to an already great device. Enjoy your learning – you’re going to be surprised by just how far it’s come over the years. It’s so much easier to work with (though far from perfect!).

  4. New normals will emerge in the next few weeks/months. I’m wondering what else will increase & decrease – certain kinds of crime? pollution? Will knowledge workers revolt and not return to their offices? Will parks, trails, playgrounds, other outdoor spaces be overrun? Will the virus behave differently in the northern hemisphere (warming) vs. the southern (cooling)? For the 1st time, Greenland & sub-Saharan Africa are looking like ideal travel destinations.

    1. There really are a lot of unknowns right now. From our side of things, we’re just taking it one day at a time, being observant of what’s going on, and adjusting as needed. One day, this will hopefully just be a small blip on the timeline. Stay safe! 🙂

  5. Haha, nice gym substitution and rational words Jim. Last Tuesday, my adventurous 75 year old parents went down to Panama for a vacation. The day after they arrived, the first Coronavirus cases were reported in Panama and then Trump stopped travel from Europe. When they went to the Panama canal, there was only one other tourist there. They said it was a bit eerie. They decided to shorten their trip and returned last Friday a bit worried about getting stuck or getting ill and not being able to get home. Things are developing fast. When they left there was no reported Coronavirus in Panama. If they made that same trip this Tuesday, everyone would be calling them crazy and irresponsible.

    1. Wow, that would be freaky to be at the Canal without seeing other tourists everywhere. I’m glad they made it home safely! It really is crazy how fast things are changing right now. Stay home and stay safe!

  6. I did some rebalancing on the way down – holding a bit for more. I’ve seldom been patient in investing but am working to be more patient and letting the knife fall further. My investment buckets are looking more like barbells – got cash on one end and stocks on the other. Most 5-7 year bond commitment are being pushed to long end. I suppose if the bear lasts more than 3 years I could be hosed, but I also think we may just rocket out of this once things reopen. After all, most all discretionary spending is on hold. Amazon is fresh out of those kid things.

    Census is looking for 500,000 employees – an option for hospitality workers temporary laid off.

    1. I wish I was as patient as you’ve been so far – I’d love to catch this closer to the bottom, obviously, but of course, we never know where that’ll be! 🙂

      I tend to have the same thinking as you on how we could come out of this bear market. Hopefully, that optimism doesn’t bite us in the butt later! 🙂

  7. TunafishTuesdays

    Hi Jim,

    My wife and I just retired as mid-50s teachers in June. So once our mostly-summer Airbnb business calmed down, we embarked on a five-month trip heading east from Boston. Spain, Bali, Vietnam, Hawaii, SF, now Mexico, testing out all of them as possible snowbirding destinations (well, Hawaii and SF were to see friends and our kids). Each place for two to five weeks to give us a good time to evaluate. Some were return destinations from travels in our younger years. Now we are in Oaxaca, MX, and loving it here. I even bought a used bike for getting around town easier! And with all the COVID-19 stuff happening back home, we might stay even longer than our originally planned five weeks.

    We lucked out by getting some winter room renters so that gives us some income in our absence. Plus there is steady rental traffic signing up for the summer (hope they don’t cancel!). We both speak Spanish very well so that is a major factor in our likely decision to continue coming back here for the next few foreseeable winters. And certainly for rationalizing our decision to stay on here maybe til end of April, rather than head back early April as initially planned. These high altitude, old colonial cities are wonderful places!

    So we have a very similar situation to your family’s, just with an age difference and without the “live weights”. But unfortunately, we don’t have the free cash to take more than a very mild advantage of the low stock prices. Oh well.

    1. Sounds like you’re in a good spot both physically and in life in general… that’s fantastic! I love how you’re making the most of what many might otherwise be a bad situation. Glass-half-full and adapting as needed – that’s the way to do it. Enjoy your time there!

      And I’ve been there on missing out on “buying the dip” before – it’s slightly frustrating but it’s not the end of the world. Stay safe out there!

  8. Seems like you guys are still managing OK, even with the world going a bit topsy turvey.

    As a mentioned over on my blog, it’s going to be a couple of months before this thing really slows down. At some point we’ll develop ‘normal’ behavior again. That will probably be a different normal than we used to have.

    I hope that doesn’t mean waiting in line for toilet paper will be normal.

    Stay safe Jim!

    1. Haha, I haven’t heard of the toilet paper being so scarce here in Panama – hope that’s not contagious as well! 😉

      I agree that we’ll probably start to see a different normal down the line. Hopefully, that may also mean some changes for the better though, too.

  9. Invest for the long run that’s the way to do it. It’s going to be more volatility over the next few more weeks (or even months), we need to get used to it. I like your at-home exercises, I should start doing that too.

    Stay safe!

    1. I imagine we’ll probably see some big problems in the market in the near future as companies start releasing their earnings reports. I’m going to call that some bigger opportunities! 😉

      Take care, Bob, and stay safe!

  10. People sell because they think the stock market will drop further. Then they’ll buy back in when it hits the bottom. But most people just can’t time it right. It’s better to stick with your asset allocation and just rebalance.
    I’m trying something new this time. I’m exchanging some funds for others. This way I can write off some losses and still maintain the same asset allocation. What do you think? I’m only doing this for a very small part of my portfolio.
    Anyway, good luck and stay safe. It’s a big change here in the US. People are hunkering down at home and everything is shut down. Hopefully, we’ll flatten the curve and avoid overwhelming the health care system.

    1. I think tax-loss harvesting is a great idea. I haven’t ever done that yet, but the whole idea is fascinating to me. That should be really helpful for you in the long run. Most of our money is in retirement accounts so that wouldn’t do me any good.

      I’ve been keeping up on what’s going on with the U.S. (on the news and through friends and family). I’m actually a little surprised but I think Panama’s been doing a much better job than the U.S. with this whole matter. They dropped the hammer here with things quickly without being wishy-washy and I think that’ll pay off (time will tell).

      Hunker down and stop the spread! 🙂

  11. I heard there are no more alcohol sales in Panama.
    Party at Jim’s house as he’s well stocked up with beer, LOL
    Our 4/20 appt with Panama Immigration is obviously cancelled. Think of all the businesses loosing out now. It’s a real domino effect. When our Panama tour was cancelled the other day, we cancelled our airfare, 3 hotels and long term parking. This is not to mention the many restaurants we would have been eating out at plus Uber rides to/from the airport & around David to our attorney’s office, etc. So we hope this virus is under control soon & everyone remains safe and healthy. Thanx for sharing your experiences!

    1. You’re right about the alcohol sales – they’ve really tightened up a lot of things here. In the long run, hopefully that pays off.

      That stinks on your appt but it is what it is. You nailed it on the ripple effect this pandemic is going to have around the world. We’re in for one helluva recession!

      Hang in there and stay safe!

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.