5 tips and suggestions to control the crisis and a recession
Heads up before you read these suggestions. These and other posts like them are my own thoughts and ideas. I’m not a broker/dealer, nor am I an investment advisor. I have no access to non-public information about publicly traded companies, and this is not a place for the giving or receiving of financial advice, advice concerning investment decisions or tax or legal advice. These are suggestions, guides, not advice.
Until a couple of weeks ago, the markets stayed unphased by the ever-expanding coronacrisis. Forward three weeks and the markets caught a serious fever. You got to wonder: with steep a decline as we saw these past two weeks, is it time to go in a bit more and “buy the dip” during this coronavirus crisis and are we heading for recession version 2020?
Like always in these precarious times, there are two strong reactions among investors like you and me: some can’t wait to buy, others are more than happy to sell while they still have some green. As you could have read, I’m in the first camp. But as the weeks pass by, it’s clear I need to take a step back. I took a deep breath and for now, wait. Using the following 5 tips I try to stay calm and sweat out this coronavirus crisis.
The R-word
The apathetic reaction of the market was very strange and a bit surprising to say the least. A lot of people first assumed that it was just another flu and that it would blow over; it clearly didn’t.
The markets have cought up in the meantime and went much lower. The word ‘Recession‘ is frequently[1][2] being dropped now and an almost unanimous conclusion is that it is inevitable.
As we saw the last 2 – 3 weeks, it’s likely that we will see a further decline. There are thousands of new cases daily -and hundreds nationally- with no end in sight. Only China -after three months!- started loosening their measures with no new cases reported for the first time since the outbreak.
A stock market recession might already be here: Thousands of people (+700,000 in Belgium) are technically unemployed, small business owner are forced to close for weeks and probably months. This is the definition of declined economic activity. The markets realize this all to well now. It really looks like 2020 will be a lost year.
5 tips to stay on course
While a decline in the market is sensible right now, it’ll reach an overextended phase where most investors will taste despair. Then we will be for sure in a recession. How long it’ll take before we reach the depths of this despair is uncertain.
What is certain, or at least based on past experiences, is that crises, like this coronavirus crisis, were buying opportunities. Without further ado, here are 5 virus-free tips that can help you see the opportunity this bear market provides.
The following two apply for those with more than one world tracker (I hope you don’t have only one stock?!):
5 suggestions
Besides the above tips you might already know, I’d like to give a few ideas or suggestions where you can look if you want to invest in a specific sector tracker or need inspiration for some specific stock.
Sweat it out
I hope these suggestions cal help you sweat out this coronavirus crisis and a possible recession. Any future prognosis is like reading tea leaves: maybe fun to pass the time but not worth betting your future (cash) on. Stay calm and stick to your plan.
Remember: this too shall pass. It might pass like a kidney stone, but it will pass.
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