Fear not – this is the opportunity that savvy investors wait for.
That is not to diminish the human impact of COVID-19.
That is our first thoughts, to keep those most vulnerable safe, virus free. I pray that we all follow the expert’s advice and help out/work with our fellow citizens. We are all in this together. And for gosh sake please only buy enough toilet paper for a couple of weeks! You are taking supplies from your neighbor. Don’t hoard! Again, we are all in this together.
401k/403b/457, HSA, Annuity Accounts
The sections below are regarding non 401k/403b/457, HSA, annuity investments. For 401k/403b/457, HSA, annuity investments we recommend using what we call the “Value” method. The Value method moves the allocation of risk based on how over or undervalued the market is. Here is our last Market Value Update. In these accounts you cannot implement stop losses or trade quickly due to trade restrictions and logistics.
IRAs/Joint/Individual and Trust Accounts
Hopefully you had the proper risk allocation in your accounts before the market downturn, or you have taken advantage of stop-losses or other defensive measures. The market was poised for a correction virus or not. Obviously, this has been dramatic due to a shut-down of much of the economy.
In recent days even high-quality bonds and gold (“safe-haven” investments) have not avoided having some losses in this market debacle. The losses on bonds and gold are small in relation to stocks. The point is even safe-haven investments have been out of favor on certain days.
Is the Selling Done – Time to Buy?
A great question that we all want to be thinking about!
I don’t think (I don’t know) that the selling is going to stop since the economic impact of everything being shut down is unknown. Markets hate uncertainty.
There is no momentum to the upside yet – I think we will continue to see this back and forth bear and bull wrestling match daily.
From a value standpoint – to get to great values we would need to double the losses. That is how overvalued the market was. You DON’T need those kinds of losses to jump in wholeheartedly, especially if you utilize momentum indicators in your investing discipline.
Energy stocks are now a screaming buy. They were a decent value before this started. However, with oil and gas fracking and their impact on supply and demand we are holding off, for now. If you invest in sectors or individual stocks you should be watching all sectors, getting ready!
Don’t Watch Your Accounts Daily!
If you are confident that you have a sound time tested investment approach, DON’T watch your account daily if you want to remain sane. Watching your account daily will cause you to act on your emotions. NEVER act on emotions when investing.
The see-saw of large daily ups and downs will continue for now. Later, even with strong positive momentum, you could easily see continued daily swings in the markets and in your accounts.
I/we are VERY excited for the other side of this! This is when you make your money as an investor as I described in this recent Blog Post.
Please don’t hesitate to contact me with any questions.
At Bartley Financial, we care about way more than your finances. We care about the life you’re trying to live; finances are just a piece of that. Call us anytime if you need fresh ideas for your finances or help in achieving your goals. We’re happy to help!