Deep breath………………Ok here we go.
Let’s just get the obvious out of the way. March was a disaster for the markets, the country and the world. People are losing their jobs, their savings, their friends and their family members. It has been a pretty dire situation for the last month as we all try to cope with this reality. Bottom line, it sucks!
One thing I love about our country is that we tend to pull together during big events and do what’s best for the greater good. I think MMM hit the nail on the head with his write up about the situation. You can read it here. For the most part people are doing what needs to be done to get us past this horrific moment in history and back on track as a society. This is encouraging to see and we will be successful.
Sadly, there are always going to be people who just don’t care. And there are always going to be scumbag politicians looking at people’s misfortunes as an opportunity for political gain. I still believe that despite the political polarization we suffer from a majority of people root for the country as a whole and want the country to be successful no matter who is running it. Those that root for failure, on either side, because they think it benefits a political party need to have their heads examined. That logic boils down to hoping people get sick, die or lose money just so someone with a different letter next to their name has a better chance at winning an election. If you have this view I hate to break it to you, but you are being used as a pawn in a game you don’t understand and are not intelligent enough to compete in. This is not a political blog so I will leave it at that.
We have been fortunate enough to continue working. I dialed back the number of bookings I am taking and also narrowed down my coverage area so I could stay closer to home. While my job is considered “essential” it requires me to go to peoples homes which puts me at a higher risk of contracting the virus and bringing it home to my family. I’m taking precautions by wearing gloves, sanitizing equipment and washing my hands constantly, but best way to prevent contraction is to limit potential exposure. Financially it’s a drag, but finances don’t matter if you are in the hospital or dead.
We are continuing to move forward with our future plans and will adjust if necessary. We currently have our first three months for full time rv living booked. We have also been selling things and socking away the cash. We consider it our get out of town quick money for now until this virus passes. Until then, like everyone else, we are on lockdown and monitoring the situation and our finances.
This has really impacted our son more than us. His school closed and will not reopen. That means his senior year is a total loss. That’s a lot of once in a lifetime experiences that he and his classmates will never get to live out. No senior prom. No Varsity Senior year of baseball. No graduation ceremony. No grad night party. All of the things kids look forward to in their final high school year have been lost. I know in the grand scheme of things what he is going through this is small potatoes, but this is what is important to high school kids. Everyone’s reality and prospective is relative to what they are losing and sacrificing in this shutdown. He has also lost his job and we are not sure what impact this will have on the fall college schedule yet.
Like everyone else in the world our finances took a hit and wiped out a lot of our gains. However, I was pleasantly surprised when I ran the numbers that our allocation held up reasonably well compared to the overall market.
Here is where we ended the month of March 2020:
Portfolio = $885,675
Portfolio Goal = $1,500,000
Amount needed to reach goal = $614,325
Our portfolio decreased by $107,095 or 10.79% from the end of February
Year-to-date our portfolio is down 15.45%
Net Worth = $1,094,751
This is a decrease of $109,169 or 9.07% from the end of February
Year-to-date our Net Worth is down 12.48%
So there it is, our portfolio is down 15.45% this year which is about $161k. That’s a lot of cheddar, but it could have been much worse if we didn’t have a decent allocation. As of the end of March the S&P 500 was down 20%, the Dow Jones was down 23.2% and our beloved VTSAX was down 20.87%. Suddenly 15.5% doesn’t sound so bad.
I think it’s pretty obvious that we are in a recession at this point albeit a self imposed one. The unemployment numbers were astronomical and will continue to increase the longer this goes on. On the bright side I believe we will have a nice rebound as this passes. The economy was very strong before the fallout. That doesn’t mean we will just pick up where we left off and say hello Dow 30k once this blows over. It does however mean that people were in a good place prior to this and those who are able to will want to resume their lives.
Another bright side to all of this are the actions being taken all over the country and the world. The small business incentives to keep people employed during the lockdown could cap the downside and accelerate the upside if this doesn’t drag out. Additionally the payments being made to people will act as a lifeline to bridge some of their expenses. There is also a broad understanding that we are all in this together. Banks are working to help defer mortgage payments so people don’t have to default. Landlords are working with tenants to delay or even skip rent payments. Companies are paying workers to not come to work. And governments around the world are telling people and businesses we have your back and will do whatever it takes. This is really an unprecedented level of mutual cooperation between people, businesses, corporations and governments. The threat of mutually assured destruction is apparently a powerful incentive.
As I said, we will get through this and we will be successful. Hopefully there are lessons learned by all and we come out a better and stronger society. Hopefully individuals and family’s who shunned the idea of an emergency fund will now see its value. Hopefully corporations who take their workers for granted will see they need them to exist and will continue some of this goodwill as the new normal. And hopefully, but not likely, the politicians who seek opportunity in people’s suffering will take a look in the mirror and serve the people and not their ideological lunacy. If not, we all have an obligation to each other to remove them from office regardless of the letter next to their name and our affiliation with that letter. An informed populace making decisions based on facts despite political affiliation is what politicians fear most.
In hard times humanity takes the lead. How long we continue to lead after this is tragedy passes is up to each one of us to determine.
Take care and stay safe everyone.
Until next time………………………