Coronavirus - Financial, Health and Other impacts II

[Brat]

I am not sure that anything the Fed does will significantly impact the market but I think the following would be helpful (not in order of likely impact):

Suspend RMDs so that seniors will keep more of their IRA money invested;

Commence a program to make more ventilators;

Insure our hospitals from bankruptcy for the cost of care of CV patients;

Aggressively fund medical research for treatment and vaccines;

Fund the CDC at a higher level;

Ask the CDC to evaluate closed hospitals for potential beds for the convalescent.

That list is by no means complete but I think the money spent will have more impact than anything the Fed could do.

 

[W2R]

Considering the impact your chair purchase had on the stock market I hope you will give us a heads up before your next purchase.

OK, will do!

Right now I can't think of anything that I need or want but if/when I do, I'll let you know.

 

[Kwirk]

Fed action when credit is at issue has an immediate impact. Right now the economies around the world are starting to slow. This really requires fiscal responses, not monetary.

I guess we need to run even larger deficits and print/create even more money. I'm not sure even that would work well in the current situation if everybody stays home and there aren't many expensive things left to buy due to supply line problems.

 

[NW-Bound]

I am jaw dropping shocked that the DOW dropped another 1000 points and CCL is actually up.

If this is really end of the world virus, who in their right mind will be booking a cruise?

CCL is bankrupt and doesn't know it yet (if this is end of the world as the markets would have you think)

The MSC ship that was denied docking at Jamaica and George Town ports was allowed into Cozumel. That helped the entire cruise industry, I believe.

I wonder if people still take cruises if they do not dock anywhere. The whole trip is a bit worse than a repositioning trip, but if the price is low enough some people will bite.

 

[MichaelB]

[mod hat on]
There have been multiple references to elections, candidates and ideologies. This will ruin what is otherwise a very useful thread. Please keep politics out of this discussion. [mod hat off]

 

[TromboneAl]

Considering the impact your chair purchase had on the stock market I hope you will give us a heads up before your next purchase.

And don't say the W word when you recline.

 

[TromboneAl]

The most they can do, when things look too bleak for you, is to carry you up to the deck for your last sunset.

Plus, you can rearrange the deck chairs.

 

[SumDay]

Yes it’s been a week. I’d be interested in those who do 100% self investing if they’ve held tight or radically changed AA this week or gone cash.

100% self investor here, who uses a fee only financial adviser every other year or so, just for moral support and impartial advice. She sent an email last night to her client list, advising to stay the course. "You only lose if you sell..."

In 2008, our megacorp 401(k) was still "paper" based, and I just didn't open my statements until 2009 when things started looking up. My 401(k) was a 201(k), and I didn't even know it until it was a 301(k) . I just heard lots of moaning and groaning at work and kept on truckin'.

I am at 45/35/20 so have cash to keep us comfortable for ~5 years. I have checked Personal Capital several times and while my "You Index" ain't great, it's certainly not as bad as the Dow or S&P. I used this blog post as the starting point for our personal investment strategy.

This too shall pass. May not be as quick as we'd like, but it will.

 

[NW-Bound]

The Chinese central bank is injecting money to help small businesses that would go under otherwise. Of course, they are the hardest hit.

Hong Kong is considering measures that include giving every resident adult HK$10,000, which is US$1284. Tourism is hurt badly there, even before the virus breakout due to the political protests. Hotels are running less than 10% filled, with room rates of less than 1/2 of normal.

Even Singapore which has less than 100 virus cases is considering a similar measure of giving away free money. In addition, it was just announced that political office holders will forfeit 1 month of pay. I am impressed. When are we going to see any other country doing that?

 

[friar1610]

Nominal 50/50 allocation in retirement. (Was at 48/49/3 just before the drop). Will likely rebalance if stocks get as low as 40% (they're 44.8 now). Also have a dollar floor on FI and will not balance out of FI into equities below that level even if that keeps me under 50% equities for the long haul. (That floor is to ensure many years of living expenses for my wife in the event of my demise and consequent lowering of pension/SS income to her). So far, no particular worries but realize I may not be so sanguine if things keep going south.

 

[Clone]

If this is a repeat of 2008, will we be seeing concerns about pensions again?

I can't think pension fund managers had any better crystal ball than the rest of us and were/are caught with their pants down.

Just another one of those snowball effects.

I have not done the end-of-the-month totaling yet, but where are we at compared to what the market has been doing? What I am trying to say is this- Yes, the market has corrected, but the 1 year results are still not bad. There may be some fund managers that got on the wrong side of a sector that really took it in the chops, but a whole market investor is still riding the wave. Sometimes when you ride the bull, you get the horn!

The S&P is where it was in October 2019. Roughly 5% above where it was 1 year ago. The sky is not falling, but perhaps we have skimmed some of the irrational exuberance off the top.

 

[Dawg52]

Currently have my head stuck in the sand so haven't done anything. I do have a set of new golf irons on order so doing my part to help the economy.

 

[MRG]

I guess we need to run even larger deficits and print/create even more money. I'm not sure even that would work well in the current situationif everybody stays home and there aren't many expensive things left to buy due to supply line problems.

If everyone stays home?

One topic repeating on other boards is the inability of our workers to stay away from work for more than a week. Many don't have sick time or financial resources to stay home. I've seen ongoing discussions about if they could seek medical attention when they don't have insurance or the funds to cover their deductibles and copays. It's a stark reminder of how many people live paycheck to paycheck.

Hopefully we don't get to the point where widespread containment is needed.

To the question of what changes to portfolio or spending? NADA. 50/50 allocation with enough CDs, short term bonds for 6 years when I start SS at 70. At that point ~80% of our necessities are covered by SS.

 

[Kwirk]

If everyone stays home?

I apologize for my careless word choice. Obviously, everybody (including me) won't be staying home. I will be avoiding unnecessary trips until the situation is clarified.

Businesses, large and small, may be hurt. Employees may suffer job losses. This may lead to a downward spiral. Note that I say "may."

 

[CRLLS]

I haven't done anything (yet) in response to the recent correction. My AA is ~80/20 and will continue to stay that way. It is my plan, and I'm sticking to it.

I expect market to go even lower. At some time, I will pull the trigger to do this year's Roth Conversion. For a given dollar amount, I can convert a larger percentage of my IRA during times like these. I'm waiting for a bear market before I do it. By the way it has continued to drop at this steady pace, I expect it to be a bear market within a week or so. So goes my prognostication, for what it is worth. I wonder if I will pull the trigger then or look for a deeper market drop?

 

[neihn]

For "fun" I made a quick and dirty google sheet of all of the SP 500 stocks. It updates in real time (well as well as the google stock api's actually work).

Here is a link to the sheet: https://docs.google.com/spreadsheets/d/1ioP9gPCgZ0a67CYdmSYe_9j9gnuIWg1czmVstvdcJ8s/edit?usp=sharing

Some notes:
1) It isn't pretty - I put this together in less than a half hour.
2) The list is a bit out of date - so those show up as N/A or "No data". I hope to put together a corrected/updated list when I find one.
3) You can change the date in cell H1 for a different look back period. I used 2/19/20 just as a test.
4) The 2nd sheet shows a scatter plot of the 500 securities with how much % change from the H1 date field.

5) You are welcome to copy and modify the sheet. My only ask of you is that you share your improvements to me. (You can either publish here or DM me.)

Hope this helps a bit for those of you who do individual stocks.

Thanks.

 

[Dash man]

In the past 24 hours I’ve bought AAPL, V, and did a fairly large conversion from my tIRA into my Roth. I’ve also added funds to the 529 college accounts for my three grandkids. If the markets continue down I’ll plan on buying some more.

 

[RobLJ]

Taking Gains

As I've indicated elsewhere, in January I took about 35% of 2019 gains, with the intention of scraping off further gains as they occurred, in 3% increments.

Today, I finished taking the remainder of 2019 gains (less than in January, after the correction) and am now sitting on 5 years of cash/short term bonds, rather than 3.75 years. At this point I'm sitting tight and watching; this is all I intend to do since this makes me at a 52% stock allocation, with a goal of 55%. If the market continues to fall next week or through March, I'll probably put 1/2 of today's cash back to work.

I do not recommend anyone to replicate what I did (I expect a snap-back rally will occur next week or the week after, given the VIX) but this is motivated by the fact my part-time online gig runs out in May (although checks continuing through September), so this cash takes me past full SS age in 4.5 years.

Last Friday, I almost scraped off gains, but the market "scraped off" this week what I was intending to scrape! Hee! Last year was good to me, and even after this week, the 1 year gains still look good.

 

[NW-Bound]

Currently have my head stuck in the sand so haven't done anything. I do have a set of new golf irons on order so doing my part to help the economy.

I don't think the US economy is hurt yet. If you feel generous, you have to book some travel to the countries whose economy needs help. And stay as long as you can.

 

[Karloff]

Mainly staying the course. Early 40's, so plenty of time, and hopefully this too shall pass.

I have actually been buying quite a bit these last couple of days: EPR, WPG, ORC, MO, etc. I am mostly an income investor and some of these have incredible yields now! MO is at almost 9% yield today. I am trying to use this opportunity to keep building my monthly dividend portfolio.

Having said this, I am about 75% cash. But always have been. Too paranoid in nature to risk more in the market, although I missed a lot of the gains from the past 12 years, of course.

 

[Dtail]

Plus, you can rearrange the deck chairs.

Might not have to arrange anything if you are the only ones on the cruise.

 

[Katsmeow]

Yes it’s been a week. I’d be interested in those who do 100% self investing if they’ve held tight or radically changed AA this week or gone cash.

Held tight. I did need to make an IRA withdrawal this week and I took it solely from bond funds. My AA was rebalanced by coincidence a few weeks ago to be 50/50 down from 55/45 (not related to anything except I was out of balance). Now at 47/53 so not far enough out to rebalance.

Anyone else thinking about cutting back/postponing some “blow that dough” activities?

I have thought about it but no real plans yet. We just finished a very large house remodel and have plans to buy some furniture related to the remodel. Still plan to do this. But if this moves into recession territory then we might hold back on some discretionary spending.

 

[Yoheadden]

Just heard that we could go down to 2018/2019 levels if we haven’t already.

That being said, I plan on holding the course and making regular contributions as planned.

I work in retail & 80/90% of our products come from overseas. I haven’t heard from Sales Reps or Suppliers about any adverse effects, but I would think it will be just a matter of time.

 

[2177V]

Yes it’s been a week. I’d be interested in those who do 100% self investing if they’ve held tight or radically changed AA this week or gone cash.

I was 60/40 but I reallocated to 100% treasury bonds because recession fears last Summer 2019. Treasury bonds are the only asset class to go up during a stock market crash due to the flight to quality. Since I have shorted the market, my portfolio has actually increased during this week.

I decided to take advantage of a buying opportunity in stock and I have just re-allocated to 10% stock/90% treasury bonds at the COB this Friday Feb 28. If it declines another 10%, I will be re-allocating to 20% stock/80% treasuries, etc...until I hit 60/40 again. However, that would take a 60% stock market decline.

 

[PatrickW]

Got Lucky. I think...

Cashed out of everything 2 weeks ago just before going on a vacation out of the country (yeah, I was on a cruise ship in the Pacific...).

My thought at the time was that no matter what happens, the news media would drive market sentiment down, and I wanted to lock in my gains over the past few months so I wouldn't have to worry about the market while I was in the middle of the ocean.

I'm close to retirement, and my job situation is unstable. But I could retire today if I wanted to. I figured I'd sell and be happy with what I have, and if I missed an uptick it wouldn't be much.

Boy, did I get lucky. Had no idea the market would drop this much...

I plan to start dollar-cost-averaging back into my ETF's and Index Funds. Not sure when I'm going to start doing that, as I think this Coronavirus thing has a bit longer to go before it plays out. Plus, the market has been on a heck of a run lately, and I think people were looking for a reason to get out.

People say they lose sleep because of too high an allocation in equities. I'm losing sleep because I have zero equities at the moment. Odd feeling.

- Pat