This week the market has had some of its biggest rallies since the 1930's. The Dow Jones Industrial Average on Tuesday bounced more than 11% in its best day since 1933. This generated optimism that the bottom is in. More likely, the market is going to bottom when the number of Covid 19 cases starts to peak, and between now and there will be a lot of volatility. Those who want to invest money at these reduced levels should do so in a disciplined manner investing in indexes not individual companies and smaller fixed increments.
The next few weeks we will see more terrible news from a public health standpoint and terrible news from an economic standpoint as well. We saw the beginning of that bad economic news this week with the largest number of new unemployment claims ever recorded. Warren Buffett famously wrote: “Only when the tide goes out do you discover who's been swimming naked. ” We are seeing this currently playing out with businesses and no doubt companies with too much debt and not enough cash will fail and the government can't bail them all out. Mr. Buffett's logic can also be applied also to individuals during this tumultuous time. To protect yourself when the tide goes out it's important to also look at your cash on hand and your spending and make sure you are also well insulated. Cash on hand or your liquid bucket allows you to ride out this storm without having to sell stocks at an inopportune time. Keeping tabs on spending is also critical. It is easy to rack up credit card debt in difficult times being disciplined about spending is essential in times of uncertainty. Finally, If you suddenly find yourself with more time on your hands use that time to organize make sure your important documents are in order, review your beneficiary designations, wills, health care proxies, etc. We are all trying to stay safe but with this virus our health can change in an instant as I have unfortunately seen in my own family as wife's cousin is currently hospitalized with the virus.
Senior Wealth Manager, Stephen Caruso is there to help... anytime!
If you would like to schedule a phone appointment. I have included a link to my calendar below and you can self schedule.