Coronavirus - Financial, Health and Other impacts II

[stepford]

If it's really the end of the world then I have plenty of cash around to last the few years (months?) I have left. If it's not really the end of the world then the the market will eventually realize this and recover. In either scenario there is no reason for me to move any money around.

We have asset allocations for exactly this reason. It's no fun to watch years of gains evaporate in days, but that's just how this game works.

 

[Chuckanut]

Originally Posted by Car-Guy
It's already down in the mid $1.80's in some areas around here and price of oil keeps falling.

Please do not mention that again. I can already see our elected leaders plotting to raise the gasoline tax. They always do it when gas prices plunge to lows.

 

[brewer12345]

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)

Probably a combination of short covering and new buyers/bagholders. Even if the virus fizzles, a global recession will be enough to crush them from here.

 

[Chuckanut]

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

Good point. Now I remember why I have never been enthusiastic about 'cruising'.

Seriously... We have our AA's and hopefully have them set so that we can survive these ups and down. Stick with the plan and don't be manipulated into selling low then buying back higher.

 

[erkevin]

Please do not mention that again. I can already see our elected leaders plotting to raise the gasoline tax. They always do it when gas prices plunge to lows.

They already are (considering it) in Arizona; a doubling of the gas tax

 

[LOL!]

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 in the middle of a transfer of an HSA from HSABank to Fidelity, so that account went to cash at the beginning of February and has been in limbo during the transfer process. I also sold before the drop as I clearly noted in my Market Timing thread.

And I have also bought after the initial drop as noted in my market timing thread. I am still underweight in equities, so I intend to do some rebalancing towards my nominal asset allocation later today.

That is, I have not held tight nor have I radically changed AA this week.

 

[copyright1997reloaded]

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.

 

[VanWinkle]

Please do not mention that again. I can already see our elected leaders plotting to raise the gasoline tax. They always do it when gas prices plunge to lows.

Especially in Illinois!!

 

[jabbahop]

Has this correction changed your spending plans?

I know there have been lots of conversation about safe withdrawal rates and sequence of returns in the past. One common theme is that people would normally cut back discretionary spending in bad market/sequence. I am wondering at what point you would consider cutting back on spending vs just staying the course.

We have been planning on buying a new car even though the existing one still works fine. I am now thinking about just postponing the purchase until it becomes a necessity.

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

 

[The Cosmic Avenger]

I know there have been lots of conversation about safe withdrawal rates and sequence of returns in the past. One common theme is that people would normally cut back discretionary spending in bad market/sequence. I am wondering at what point you would consider cutting back on spending vs just staying the course.

We have been planning on buying a new car even though the existing one still works fine. I am now thinking about just postponing the purchase until it becomes a necessity.

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

Ideally (based on my retirement projections as I'm still working) I'd keep my spending the same and start using up more of my cash reserves (ideally 2-3 years worth of expenses) than usual, although it would be tempting to start diverting some of that back into equities as the markets drop. But that's market timing, so I'd probably rely on rebalancing unless I had a lot of extra cash sitting around. I think it would take at least a year of this before I got substantially more conservative.

 

[NW-Bound]

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

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

They don't have respirators on ship.

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

 

[NW-Bound]

Please do not mention that again. I can already see our elected leaders plotting to raise the gasoline tax. They always do it when gas prices plunge to lows.

They already are (considering it) in Arizona; a doubling of the gas tax

Sorry as I am adding another off-topic post.

I believe that gasoline excise tax is mostly based on volume, meaning per gallon, and not based on gas price. Some states levy an additional sales tax, and that is based on price.

See: https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States

 

[6miths]

Don't plan on selling anything. Do have some cash that I am going to get back in at some point and looking like I will be able to get more than I would have a week ago.

Ya dance with who brung ya and Mr. Market has been very, very good to me!

 

[Tiger8693]

I stated a day or two ago that I was waiting to move in to some more equities. Going in with 50% of my planned buys today, will review again for the other 50% of plan on Monday.

Hopefully I'll be riding the rebound soon!

 

[Kwirk]

DW and I eat in restaurants almost daily. We'll be cutting back on that as long as we are trying to avoid the virus. When we do eat in restaurants we'll be focusing on hot foods and looking for restaurants taking extra precautions. We'll be looking for masks and gloves. The masks may or may not reduce viral shedding but they will help keep staff from touching their faces. I expect we'll be wearing gloves that we remove when leaving.

Air conditioning seems to provide a near perfect environment for survival of the virus, possibly a week or more on surfaces. Freezing probably does not kill it.

Eventually, we'll likely give up the extra measures and just take our chances (if we aren't infected sooner).

I expect that restaurants (and much of the service industry) are in for a very tough period.

 

[VanWinkle]

I know there have been lots of conversation about safe withdrawal rates and sequence of returns in the past. One common theme is that people would normally cut back discretionary spending in bad market/sequence. I am wondering at what point you would consider cutting back on spending vs just staying the course.

We have been planning on buying a new car even though the existing one still works fine. I am now thinking about just postponing the purchase until it becomes a necessity.

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

I have a 1969 Ford Mustang in my sights to blow some dough. I put the money needed to buy it in a short term bond fund. It has actually gained in this market so I can afford some gas for that 351/300 hp Windsor. Hope to complete the purchase in April, so who knows where the market will be.

 

[NW-Bound]

Other than the unpleasant sight of a Quicken screen full of red numbers, no changes yet in our way of life. Nothing to change in our spending. I did not make plan for any large expenditures, but if I did, most likely would not alter it.

If our future spending is the same as that of the trailing 12 months, the WR for that is 1.27% of the current portfolio. That WR is likely to increase, due to the shrinkage of the stash.

 

[audreyh1]

I know there have been lots of conversation about safe withdrawal rates and sequence of returns in the past. One common theme is that people would normally cut back discretionary spending in bad market/sequence. I am wondering at what point you would consider cutting back on spending vs just staying the course.

We have been planning on buying a new car even though the existing one still works fine. I am now thinking about just postponing the purchase until it becomes a necessity.

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

No, I have a fairly hefty amount in short term funds including this year’s spending money and I won’t cut back until short term funds run low.

We need to buy a new car. I’m just worried about supply.

 

[Bir48die]

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.

Was just curious and have enjoyed the responses. FYI in October 2018 I was a bit skittish and I hadn’t changed my allocation from nearly 90% equities. I went to 60/40 across the board. Missed some profits in 2019 but those are all gone anyway. So, like many of you I just “ride the pine” and watch the world happen.

 

[jollystomper]

Not changing my AA, other than making some Roth IRA contributions today for the 2019 tax year. My YTD returns through the end of February will be interesting , but with my current AA about 35% in stocks it is nothing of concern.

No spending changes, we still have plenty of cash, 5-7 years worth. At the beginning of the ear I was contemplating paying off our mortgage (balance is only $50K at 2.875%). Now it is tempting to invest that amount during these down times.

 

[W2R]

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

No way! Not yet. I am still buying whatever I want, whenever I want it.

I have enough in my local bank to do that for a very long time without any withdrawals from my portfolio at all. It helps that I am getting my "age 70" SS amount deposited in the bank like clockwork every month.

That said, I no longer regard this as a minor downturn. I could be wrong; often, I am. But still, I think this may be the beginning of that big follow-on recession we have all been waiting for since 2009.

 

[Fermion]

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.

 

[Helen]

No way! Not yet. I am still buying whatever I want, whenever I want it.

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

 

[karen1972]

+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...

After the recent Roth conversion threads I had decided to forgo the ACA subsidy this year and do more conversions. Today I pulled the trigger on that plan and figure if the market has another significant drop I'll consider going all the way to the top of what i-orp recommended.

 

[harllee]

So far my reaction to the market drop has been very different than it was to the first few days of the 2008 drop. I was primarily in equites in 2008--I was worried about the market drop and could not sleep at night. After the 2008 recession was over I redid my investment philosophy to more align with my risk aversion. I am now 40% equities, 30% bonds and 30% money market/CDs. I have been sleeping great this time. Yes I am worried about the virus and shortages but I am not concerned at all about my investments--I have not even looked at them. I know I missed out on some gains over the years by having so much cash but that is what I needed to have for my own piece of mind.

For those of you are losing sleep over the market drop--I say your investments are too risky for you. Once all this settles down you should reevaluate your investment plan and make adjustments accordingly.