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Market chaos and the proverbial "Blood In The Streets" Thumbnail

Market chaos and the proverbial "Blood In The Streets"

These last few weeks have been about as crazy as most have ever seen (at least since 2008-09). These times are miserable, there's no better way to put it. The Coronavirus has ripped its way through societies across the world, and caused mass disruption in global supply chains, governments, and companies everywhere we look. It has affected every type of investment out there; stocks, bonds, treasuries, oil...even gold, considered by many a safe haven, has shown volatility which raises doubts. 

The NBA has suspended its season, the NCAA tournament will be played without fans (if played at all), colleges across the country will be empty as they move to online classes. It's a wild world we've only seen before in movies. 

I keep coming back to a famous saying by Baron Rothschild: "Buy when there's blood in the streets, even if the blood is your own". No one with an investment has not been affected by 3 weeks of hysteria. 

Well friends, things can't get much crazier than this, and emotions are no doubt running high. Here are a few things I have done, and maybe would be a good idea for you. 

  1.  I look at my personal portfolio infrequently. Why beat myself up over this? I know things are down, no reason to remind myself of it every 5 minutes. 
  2. I've increased my retirement contributions. If you have a 401(k) or other retirement plan, these are the times where we can let emotions make our decisions (and go to cash), or realize that never before in history have things gone down forever, and we have opportunities to make long term investments that are 20, 30, 40% or more cheaper than they were a mere month ago. They may go down more, but long term history suggests things will eventually turn around. 
  3. I've not become a day trader. This goes back to the first point. If we try to time things out, we tend to get whipsawed. Buying today, selling tomorrow, etc, only leads to more despair. I'm trying to be very disciplined about my process.

Discipline and patience are extremely important in times like this. By maintaining these processes, I believe we'll look back at this and realize it was just under the long list of times in which opportunity was created. 

-Jason  Henrich, CFP®