March felt like an eternity. It all started well in Jan and then we had a furious rally till Feb but then, everything fell apart. S&P declined and kept declining until it fell 35%. Even after decline this week, the indices are notably off their worst levels seen in the middle of March, but still well below where we were in January. But, money is not everything in life, is it?
Globally, more than 60,000 are dead and over a million infected with the corona virus. The number of Americans seeking unemployment benefits set a record for a second straight week, following last week’s report of 3.28 million filings. With no cure, a 100-year-old tuberculosis vaccine is being investigated as a potential weapon against the pathogen. General Motors stopped making cars and undertook a four week sprint to build badly needed ventilators.
And so, in the grand scheme of things, it seems trivial to discuss the outlook for the stock market, at a time when an increasing number of people around the world are coping with the corona virus pandemic in their own lives. What is clear is that the market remains understandably gripped by fear and there is no one who can reliably predict how this year will end.
Future Wealth’s View
Taking a big picture view, what we have long relied on is that nations flourish and succeed when their governments and institutions can foresee calamity, mitigate the impact and restore stability. When this corona pandemic is eventually conquered and life reverts back to normal, we will all look back as it being a clear sign that our governments and institutions have failed us. Much like 9/11 was an intelligence failure, corona virus would be deemed a colossal failure of governments to prepare its citizens for a pandemic.
And so, until there is a cure, we have to recognize that life, as we know it, is not about to end. Yes, our normal way of living our lives has been severely restricted. But, this too will pass. In these extraordinary times, even skilled and experienced investors are falling into the emotion trap. Staying at home 24/7 was never something any one of us was prepared for, but that does not mean one should be looking at the stock market and their own net worth every day. Instead, bake some bread, play the guitar, go for a walk, and just be happy to have another full day with spouses and kids.
Life will eventually return to normal and we can all resume complaining about our own horrendous commute to work, long lines at the grocery store etc. And, start looking at stock market tickers once again between meetings, emails and phone calls at the office.