The 2020 stock market crash began
Monday, March 9, 2020: The Dow fell 2,013.76 points to 23,851. A 7.79% drop.
Thursday, March 12, 2020, the Dow fell a record 2,352.60 points to close at 21,200.62. It had fallen 9.99%. The sixth-worst percent drop in history.
Prior to all this.. Dow reached its record high of 29,551.42 on Feb. 12
What it means is, we have officially entered an unchartered territory with our finances, investments and jobs. Layoffs have started and so have the unemployment claims…
While COVID-19 is real, the hysteria around it has forced the smartest people into making dumb decisions specifically when it comes to 401k and retirement investments.
Just today I had two seperate conversations with two of my friends. Them arguing why 401k doesn’t make any sense and given they have lost 50% of the portfolio, it just makes sense to cash out paying the tax rate plus 10% penalty.
I have a different and opposite opinion on all that’s going on…
Markets Will Recover Very Fast….
I’m not a certified financial planner or adviser and don’t have any credentials to suggest, recommend or imply anything. I’m not an expert on markets or have any extensive experience in trading. So read what I’m saying with a pinch of salt if you may.
By virtue of living through two market crashes, 2001 dotcom bust and 2008 subprime collapse, it’s very clear to me that the fundamentals of the 2020 market are strong. Some are arguing the markets needed a correction anyway. Whatever may be the case.. clearly we are dealing with something that’s completely external and not inherent to the market.
The thought that we will have two back to back quarters of GDP drop seems doubtful to me. So technically we won’t be in a recession. Again that’s my hunch, will keep my fingers crossed.
No the world is not ending, there is good news coming from the Wuhan Province now. No new cases of CORONA VIRUS repored there.
As this passes, the service industry will be back in a few months. Travel industry will follow. The Tech industry seems to be holding on well. In just a matter of time we will be seeing a recovery. How robust will it be? we don’t know that yet.
I Entered The Market Today…
Many years ago one of my real estate mentor’s told me “The best time to invest is when there is blood on the streets”
By blood he meant when things are extremely cheap, unwanted and or are heavily discounted. I think we have entered that phase with the markets now. Stocks are at a discount now. While I have no idea if the stock market will further go down before it gets better, I’m betting its going to stablize from here on and moreover there is no methodical way to time it anyway.
Here is a small video documenting my entry to the markets..
Why I selected this mutual fund, why I automated this investment for a foreseeable future, how I exited at the top just a month ago and why I’m getting back into it now.
You should see this video if you plan on gaining exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. If you want low costs, broad diversification, and the potential for tax efficiency. Investors looking for a low-cost way to gain broad exposure to the U.S. stock market who are willing to accept the volatility that comes with stock market investing may wish to consider this fund as either a core equity holding or your only domestic stock fund.