Coronavirus - Financial, Health and Other impacts II

[Ronstar]

I’m intrigued by what buy and hold investors have “lost”. Nobody loses money until they sell. The losses are merely hypothetical amounts that investors could have lost if they had bought at a high price and sold at a low price.

Same thing with gains. Stock prices at the beginning of a month or year are meaningless. Only the buy and sell date prices matter.

 

[Badger]

we fit that bill. haven't done a thing and not planning to. we will ride this "crisis" out like all the others.

Because we were getting nervous a couple of years ago I began having all the dividends and RMD money in our IRAs placed in MM accounts. The MM account has become fairly sizable. There is (and will be) no need to access any of this for expenses since we are still frugal, happy, and finding difficulty changing our pre-retirement behavior. There is enough in SS, pension and other investments to take care of us.

If the market continues to decline and if we are still around I may use that time to invest that MM money for our grown children's inheritance. Otherwise we will just ride this out like the last time.


Cheers!

 

[candrew]

I've done nothing and plan to do more of the same.

That is a very Zen like approach.

 

[iloveyoga]

we fit that bill. haven't done a thing and not planning to. we will ride this "crisis" out like all the others.

Same here...the ones I remember clearly 1987, 2000, and of course 2008-2009.

 

[audreyh1]

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 haven’t done anything. I was at my target AA* at the beginning of 2020. If stocks drop low enough I’ll rebalance - my bands are wide so it usually takes around a 20% drop to make me rebalance.

*50/50 which I consider reasonably conservative already for us.

 

[target2019]

This is setting up to be the week that was. Asset allocation protects us.

 

[Dtail]

I haven’t done anything. I was at my target AA* at the beginning of 2020. If stocks drop low enough I’ll rebalance - my bands are wide so it usually takes around a 20% drop to make me rebalance.

*50/50 which I consider reasonably conservative already for us.

Who knows, you might hit your Cape 10 rules rebalancing soon enough.

 

[audreyh1]

Who knows, you might hit your Cape 10 rules rebalancing soon enough.

It’s at 28.13 now. Still a ways to go, but I notice that the ratio is below where it was in Dec 2018.

My rules are such a gradual slope I doubt it makes much difference on how soon my triggers signal.

 

[mrfeh]

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.

Haven't done anything. I may buy equities today, as we are getting close to our rebalancing bands.

 

[Car-Guy]

On a positive note "for the consumer", just watch the price of gas at the pumps! It's already down in the mid $1.80's in some areas around here and price of oil keeps falling.

Makes me wonder if there a bottom number to how low the oil companies can go and still make a profit on a gallon of gas.

 

[LOL!]

It wasn't but a little over a year ago that the US Total Stock Market dropped 15% in 3 weeks. Have we forgotten December 2018? Here is a chart to remind everyone:

So what you did with the previous less-than-a-month drop might help you decide what to do now.

 

[jazz4cash]

We are planning to shop for a 3 year old midsize SUV in the fall. DW asked today if a supply chain disruption would have an effect on the availability and cost of such a vehicle. I told her it will be very hard to tell because factories may struggle to produce new cars (which spills demand into the used market) but a recession will make people less eager to buy new/newer cars. No idea what will happen, in other words.

Another possibility is people will lose earnings due to these disruptions and fall behind on car payments. A bumper crop of Repossessed vehicles will suppress used car prices and bargains will abound for buyers with cash or good credit.

 

[Lcountz]

Great time to do a Trad to Roth conversion...

Except for the "pay the tax"part.....on assets that may go down more in value...


BUT....I believe the market will go back up eventually..it always does...


RE: The virus....It IS summer in the southern hemisphere right now.....and yet, there are cases appearing.....

 

[Sittinginthesun]

"Be bold when others are fearful"

I am a buyer and getting some trades executed this morning.

 

[garyt]

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 going to start selling a little right before the drop started. Sold a little on 2-20, then the drop hit. I thought I could get some sold before the big drop because the market had recovered the next day or so from every earlier drop. I waited about a week too long.
I sold all my Disney stock a couple days ago. I don't see people rushing to theme parks if we get a full blown breakout here. I'll buy back in somewhere down the line.
All told I went from 75/25 to 70/30 or 65/35, virtually meaningless. I won't buy back unless we get a drop of 20% or so.

 

[TromboneAl]

It's already down in the mid $1.80's in some areas around here and price of oil keeps falling.

That's unrelated to COVID19. It's dropping because we bought an electric car.

 

[garyt]

Still hoping for a quick end to the virus with the increase in sunshine,

So come on sunshine and clear this up!

What I don't get about that, it's 85* in Singapore and it doesn't seem to be helping there. So does the heat really effect the virus?

 

[sheehs1]

To put this into a bit of perspective (at least for me), a years worth of expenses down so far. I hold mostly dividend paying stocks. The only position I have sold is Disney-mainly because I purchased it too high, am hoping to pick it up cheaper and am wondering if they will have to close their parks in the U.S. (already closed the ones in Asia). I am making a "buy" list.

Otherwise, I am holding thru this. After 2008, I went to a "bucket" strategy approach with the specific intent that market investments were there for the long haul. With over 20 years in cash, CD's, etc. I am sleeping at night. Yes, I know most here would think that too conservative.

i agree with Brewer's analysis and think we could tip into a recession if this is protracted. There is already rhetoric about how dependent we have been and are on the supply chains out of China. I wonder if this will result in "supply chain" changes.

The Fed is signaling rate cuts but since this is not a financial liquidity issue, I don't think that will help much, if at all. With the negative interest rates elsewhere in the world, there doesn't seem to be a lot of ammunition to avoid a global recession (which in my opinion was already happening) other than more Quantitative easing.

 

[Skoach]

Great time to do a Trad to Roth conversion...

Except for the "pay the tax"part.....on assets that may go down more in value...

+1, I will be doing this today after my calculations to make sure I stay below ACA tax cliffs. May have more room later in the year if tax loss harvesting comes into play...

 

[TromboneAl]

I see this event as an illustration of the problems with technical analysis* of the market. You can analyze the support levels, trends, etc., but something unexpected can upend all of that.

*Technical analysis is the interpretation of the price action of a company’s underlying stock (or any tradable financial instrument). It utilizes various charts and statistical indicators to determine price support/resistance, range and trends. It identifies historically relevant price patterns and behaviors to help forecast potential direction of the stock. This methodology focuses only on the price of the shares, not the operations of the company.

https://www.investorsunderground.com/technical-analysis/

 

[Sunset]

On a positive note "for the consumer", just watch the price of gas at the pumps! It's already down in the mid $1.80's in some areas around here and price of oil keeps falling.

Makes me wonder if there a bottom number to how low the oil companies can go and still make a profit on a gallon of gas.

Here in IL it is $2.79 that is crazy high..

 

[Sunset]

Great time to do a Trad to Roth conversion...

Except for the "pay the tax"part.....on assets that may go down more in value...

BUT....I believe the market will go back up eventually..it always does...

RE: The virus....It IS summer in the southern hemisphere right now.....and yet, there are cases appearing.....

The case in Brazil was a guy that flew from Italy.

My plan is to do a little IRA to Roth conversion now, I'll do an in kind transfer just move the stock over.
Then if market continues to drop, I'll move more later.

I don't want to do it all now, in case everything falls lower.

 

[Fermion]

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)

 

[Chuckanut]

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

If it really is the end of the world, why not end it on a nice cruise to somewhere exotic?

I tend to think that the long-run consequences of these things are over blown, though it certainly is a real problem in the short and mid-term. The market is now down about 15% as I write which is getting within sight of the 20% Bear Market Standard. So, in the words of my good Klingon friend K'mpoc "Today is a good day to buy". He might just be right.

FWIW, some good may come out of this. For starters having most of the world's supply of drug making raw ingredients coming from just one part of the globe that is run by authoritarian regimes may be identified as a problem area. Assuming our leaders wake up.

As usual, my crystal ball is cracked, I can't read minds, and my time machine is broken. YMMV.

 

[Fermion]

If it really is the end of the world, why not end it on a nice cruise to somewhere exotic?

I tend to think that the long-run consequences of these things are over blown, though it certainly is a real problem in the short and mid-term. The market is now down about 15% as I write which is getting within sight of the 20% Bear Market Standard. So, in the words of my good Klingon friend K'mpoc "Today is a good day to buy". He might just be right.

As usual, my crystal ball is cracked, I can't read minds, and my time machine is broken. YMMV.

But I mean really? You want your last few weeks experience to be being on a respirator in a tiny cabin on a ship?