DIS and DAT – Fear. - March 2020

Our periodic communication that reminds you to ask, “Should I react to those headlines?”

”We are not in Kansas anymore”

            The wizard of Oz

General Markets Update

           Boy this is a tough one for me to write. The last Dis and Dat had the title FEAR? It was about the fear of missing out. Now I believe we are at FEAR. and will share my thoughts about that subtle title change.  This time we are discussing people’s health and the crisis around it. The health topic is a difficult one for me, as I have very little knowledge, and when I attempt to acquire knowledge, I can easily get a weak stomach, and high anxiety.  The low equity prices, the low interest rates, the low oil prices can compound the fear and anxiety.  The high level of unemployment claims, the demand spike for basic supplies of nutrition and healthcare is very different from standing outside two days for a new and improved iPhone.

            We all seem to be in new territory here.

            From a market point of view – a rosy economic picture and “buy on the dip” mentality” has gone to the historical perspective.  From the fear of missing out a few weeks ago, we maybe collectively expressing thoughts like “We’re not in Kansas anymore” from the Wizard of OZ.  These are real life and death questions that individuals, families, and leaders are grappling with.

            I still cannot predict the future.  I still do not understand most health issues. I do believe that I understand fear in the market place, and we are there.  The fear is justified, you are not “irrational” if you are afraid. That does not mean that prices can’t still go lower.  However, I do not believe that fear should dictate your investment decisions.

Bargains?

            I do believe that even if the economy turns into a different economy due to the virus that bargains are likely to exists currently.  That doesn’t mean I know for sure, this is after all still investing and investing involves uncertainty and risks.  I think there are a few points to keep in mind when talking about bargain hunting.  I don’t think it’s necessary to find all of the bargains out there.  I don’t think it’s necessary to find the bargains at their lowest point.  I don’t think it’s necessary to find the best bargains.  I do believe that you should still focus on making the fewest and smallest regrets possible on an investment basis.  I do not believe that you have to rush, even if “markets rise”, it is likely that some “bargains” remain. If you have been an investor, then you still have around 3 to 5 years in preservation, cd’s and treasuries of short and mid-term duration along with money markets.  If you maintained an investor mindset, then on the investment side you still have a variety of investments, representing unique risks in some magnitude. So if you can maintain an investor’s mindset and have new funds to invest with (meaning you want to bring your preservation/ short term/ midterm down into that 3- 5 year range, then let us know. 

We hope this helps to give you an investment perspective on a terrible human health crisis. Be safe and

Talk with you soon,

James

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