This is not something anyone could have predicted. The irony of my blog name @laughitsjustmoney is not lost on me now. A new virus? Social distancing? A run on toilet paper?? In what universe would you think in 2020 we would be limited to gathering in small groups, people would all be working from home for a bad reason, and we would be confronted with massive job loss and an unknown global economy? Let alone the potential of losing millions of lives. This is what we thought the future would look like:
We thought we would see flying cars, eradication of things like cancer, potential of living on another planet. Those dreams are still floating around - I saw Jeff Bezos speak a few years ago, and he's all about space. It's the new rich man's hobby it appears. Wonder what he's thinking about right now. No doubt his wealth has declined in the last couple of weeks too.
When I was working for a financial advisor in 2008, I remember days like this, watching the talking heads follow the up-down-up-down days of the market. I remember the years following the rebound in 2009, where every investment salesperson and economist alike said a time like 2008 won't happen again in our lifetime. It was unprecedented, and we'll be smarter next time. Problem is, there's always a next time in the stock market.
So what's happening now? Here's my feeling, and you might not like it: we don't know. The crappy thing about working in the investment industry when something like this happens is that we don't know what "it" was until after the fact. The markets are operating on uncertainty with a panic cherry on top. We do know that the market has been significantly overpriced for some time, and that the positive returns and easy investing wouldn't last forever. It happened in the early 2000's with the proliferation of day trading. Everyone and anyone could find the next Pets.com. Remember the eTrade baby? He debuted right before the 2008 Great Recession. The last few years have felt no different. Throwing a dart could find a good stock or fund, and investors had become complacent.
So what am I doing, or how am I reacting as a professional investor? Listen folks, I feel it too. I watch the markets more than I should. I read multiple commentaries and stories and check the Dow and the S&P more times per day than I recommend. My email is blowing up with commentary and webinars from experts' two cents. I received the emails a week in, two weeks in, you get the idea. All of the noise is guessing, and exhausting. What I care about is how my clients are feeling about this. What are they really worried about? Delaying retirement? That the market will never come back? That all of their saving was for nothing? Will the market go to zero? Is this the end?
Emotions aren't logical, but they are real. Pick up literally any self-help book or psychology magazine and you'll see this. One of the recent webinars I attended said that the logical brain gets tired very easily, so we have to connect and be there for the emotional brain. That SOB can endure. So if you have been watching all of this and forgetting to blink, breathe, and take care of yourself, call or reach out to your advisor. Shoot me a message in the "contact" section if you feel the need. This is part of our job description, and you shouldn't be embarrassed by what you are feeling. You probably know your feelings or desire to pull out of the market aren't rational, but you still feel them and need to release them. We need to be there and take care of you in times like this. Heck, we justify our existence by preventing you from making mistakes in a time like this (and for other things, but let's focus on the here and now).
Other than caring about clients' reaction to this, I'm doing the math. I'm nerding out on how markets are performing vs. the funds I've chosen for clients. I'm looking at performance and the percentage allocation of the funds I've chosen, and looking at longer-term performance as well. Pro Tip: if you look at year to date performance of almost anything in the stock market, have a drink or an oxygen mask nearby, or better yet, just don't do it. I'm also looking at market fundamentals, and investor sentiment and guess what? I'm still hopeful. Let me say that again with capitalization for emphasis: HOPEFUL.
I'm hopeful because we live in a really incredible country that loves a Rising Phoenix. A comeback story. We will rise from the ashes of this. I'm hopeful that this virus will die by the summertime, and companies will get to work again - in overdrive. In the meantime, take care of yourself. There's nothing that bothers me more than the people in newsrooms yelling at me about how bad things are. I'm actually physically uncomfortable watching it. My chest is tight and I don't breathe as deeply as I should. So from now on, if someone in my family has it on, I think I'll leave the room. Who's with me?