A Coronavirus Mixtape – All About Your Benjamins™

Wednesday night was a weird night.

For me, it was reminiscent of the night Lehman Brothers went under. I remember being at Sakura in Indianapolis celebrating our second wedding anniversary; during dinner, my phone began blowing up with alerts about the chaos that was occurring on Wall Street. That night I called all of my clients to let them know I was following along with the news, reminded them of their financial plans, that the events unfolding would pass, and to stay the course. I’d be lying if I didn’t have any doubt in my mind, but I believed in what I was telling my clients. That night I felt like things were spiraling out of control and I didn’t know when it would stop…

For a moment Wednesday night, I had that same spiraling feeling–only this time it didn’t seem as severe as the Great Financial Crisis. Earlier in the day, it was announced that the NBA was suspending its season, then local schools began canceling, then it was March Madness being canceled, and then rumors of the boys’ school being canceled–oh and all of this was happening as the cases of coronavirus rose and the market hemorrhaged. I knew things would eventually slow down, but once again I had that feeling of not knowing when.

With all of the uncertainty, speculation, rumors, panic by some and a lack of concern by others, and fear it’s important to take a step back and look at what we’ve experienced in other times of uncertainty. Rather than do all of the research myself, I’m going to lean on some of my friends who have already done so. Here are a few great blog posts from the last week with a few of my thoughts.

Morgan Housel: Corona Panic (March 2nd, 2020) Morgan has a way of communicating powerful messages with few words–something I struggle to do. This first of his two posts in the lists has some great points to ponder as you digest what is currently going on in the world. Give some extra thought about how Morgan points out this is “the first global crisis in the social media age”–social media is a blessing, but sometimes it can be a curse. It’s great to have access to information (blessing), but it’s hard to verify information on social media (curse). Social media can also keep you living in current events–today it’s the coronavirus, a bear market, and a looming recession. It’s ok and probably best to take a break from time to time and think about other things in your life and allow yourself to focus on the things you can control.

Morgan Housel: Corona Panic Part II (March 12th, 2020) A continuation of Morgan’s first post–what’s crazy to think about is how much changed in those 10 days. If you find yourself stuck at home with nothing to do or with a little extra time than usual, take his last piece of advice and start journaling how you’re feeling, what’s going on, and anything else that comes to mind. It’ll be very interesting and helpful for your financial plan and investments to look back on your emotions during this time.

Michael Batnick: Everybody’s Talking About It (March 12th, 2020) When it comes to your portfolio, it might be difficult to fight your emotions and desire to do something. Add in hearing your friends’ and family’s emotions and decisions and it will be even harder to resist the urge to take action. Only you and your financial advisor can truly determine what, if anything, you should be doing at this time and Michael’s post is a great reminder to stick with your plan.

Ben Carlson: Creating An Overreaction Plan For The Coronavirus (March 12th, 2020) Ben’s perspective to what I described Wednesday, along with some actions you can begin taking as we are not out of the woods yet–we might just be entering the forest.

Josh Brown: The 9/11 Analog (March 11th, 2020) I mentioned that this week felt a lot like 2008 and Josh compares it to 9/11. I wasn’t in the business or even following the markets on 9/11, so I can’t make the comparison, but Josh does a great job. His final reminder might be the most important, while I don’t remember what it was like as an investor, I do remember the fear that turned into perseverance that turned into pride that turned things around. Just like 9/11, the Great Financial Crisis, and every other major event we’ve experienced, we will get through the coronavirus and come out better, stronger, smarter, and more prepared.

Ben Carlson: The Relationship Between Recessions And Market Crashes (March 11th, 2020) Past performance and experiences do not predict the future (you already know this), but having some data to compare to past recessions gives us good perspective. Thanks to Ben we get a chance to revisit past recessions and see what that has meant to the market. While it might seem that a recession is guaranteed to cut the market in half (recency bias takes us back to ’08), that has not always been the case. We could be on our way to setting a new record, I hope not, or we could have seen the worst, I hope but doubt, and will take some time to get back to the pre-coronavirus days.

Ben Carlson: How Long Does It Take To Make Your Money Back After A Bear Market? (March 13th, 2020) Once again, past performance and experiences do not predict the future, but having some data to compare to past bear markets provides us a similar perspective as the post above. The coronavirus fallout could last shorter or longer than your favorite recession of the past, but thanks to Ben we can see that eventually your portfolio will recover and it probably won’t take as long as you think it will.

I’m sure there are other great posts out there and I’ll continue to share them as I come across them, but these were the first ones I saved in my Notion database.

As I work primarily from home over the next few weeks–thanks to Zoom, I plan to write more than usual. I’ll be back in the next couple of days with a post to share how we can be opportunistic in times like now–some of what I’ll share you’ve probably already heard or have thought of. But, I think I have a few outside the box ideas to share!

Stay safe and keep washing your hands!

Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimers page.

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