As we continue to watch both from the sidelines and the interior of the Coronavirus tragedy, there exist lessons learned and lessons yet to be learned. Mistakes made past and present. But in looking at history and researching the aftermath of past global tragedies there is evidence of subsequent innovations along with lucky breaks that surpass the imagination.
As we all “shelter in place” and our kids are in “cyber school” we take in news both of the day and of the bigger picture. Here are several personal financial-related cautionary thoughts and a quick graphic (see below). People way smarter than I say that data is key to decision-making and the ability to stick with a plan in crisis situations.
The markets are telling us that the Coronavirus situation and the aftermath of an economic slowdown is likely not going away any time soon. The evidence is in the “indiscriminate selling” of nearly every asset class:
The past several weeks has seen the first pandemic in the era of social media. The last H1N1 Influenza pandemic was in 2009. In 2009, Facebook was young (founded 2004) and Twitter was in its infancy (founded 2006).
In addition to a handful of other major factors, the Covid-19 coronavirus is descending on the planet during: a US Presidential election year, a high-level fight over oil between the Saudis and Russia AND immediately following an almost 11-year UP stock market in the US.
A couple of points of perspective to this very hectic open to the US stock markets:
- There are comparisons today and the past two weeks to the 2008-2009 financial crisis. The US stock markets were most volatile n Fridays and Mondays throughout late 2008 with financial institution failures that took place over or near weekends – Bear Stearns, Lehman Brothers…and then Merrill Lynch.
Lifestyle, goals and spending are what drive a successful investor’s attitude in volatile markets.
Whew! What a stretch in the markets. During record-breaking volatility both UP and DOWN I have been on the phone continuously with clients and friends for 2-3 weeks. The BEST part is that 99% of the phone calls have been positive in confirming:
- Asset Allocation
- …and various conversations about beverage of choice.