Well, would you look at that! Here we are 6 weeks into the pandemic lockdown, staring down directly into the precipice of a humongous recession … and the stock market is rising. Incredible! Absolutely incredible.
This seemly bizarre market move has the so-called “experts” calling it a “sucker’s rally”, warning investors to stay away. Yet the stock market is undeniably rising again, making the gurus and self proclaimed experts look a bit foolish.
Mr. Market has been in a positive mood the last couple of weeks. Never mind that we may have only reached the halfway point on this pandemic. I can’t complain about the positive results either — We invested a good chunk of money very near the recent bottom and our new holdings have done well.
Is this a suckers rally? Will the rally continue, or will there be new lows ahead?
I have no idea! The stock market can and will do anything in the short term. Long term, it’s still going to be a weighing machine.
Right now, the market appears to be recovering from an incredibly swift case of FUD (Fear, Uncertainty, and Doubt). Those emotions hit investors like a ton of bricks at the beginning of March, and are only now beginning to subside. The unknowns about the COVID-19 pandemic are slowly becoming knowns again.
With potential treatments being developed, it looks like sunny skies off in the distance.
Never mind the fact that the road from where we are now to those sunny skies is going be bumpy– Expect to see bad quarterly earnings, even greater unemployment, losses at the more vulnerable companies, and all around terrible financial results.
Am I Worried?
Since my income is primarily derived from investments, you’re probably wondering if I’m worried about all this. Does the impending recession, or any of the wild market swings keep me up at night? Am I concerned about my diminished net worth, or maintaining my financial independence?
Honestly, I haven’t lost a single minute of sleep over these market perturbations. Perhaps it’s because we were a little better prepared than most to deal with the effects of the Covid-19 pandemic. Or, perhaps it’s because I’m so exhausted from homeschooling my two elementary school-aged kids every day.
Homeschooling is not easy. I’m not going to deny that a certain exhaustion hits me every single night that makes falling asleep a simple affair.
Ten minutes after my head hits the pillow, I’m out like a light!
Another reason I don’t worry is because of my incredible faith in the power of individuals to adapt and carry-on. Each of us is going to wake-up every single day to try to tackle the problem of how to feed our families and keep a roof over our heads. We’ll go to work, find new jobs (if we need them), and keep pushing forward to solve the problems ahead.
The world always finds a way to muddle through. And we will… eventually.
As far as my investments go, I expect the world will inevitably unlock again… and the vast majority of my investments will still be relevant in the new world. In the interim, returns on investments are going to be diminished and I’ll need to get back to focusing on the basics: Living below our means, finding ways to save, cutting unnecessary expenses, and plowing money into investments.
To fill the financial gaps, the Tako family has years of cash available (should the economic disruption continue past 2020). Let me tell you – having all that cash available does wonders for my sanity.
How Is The Rest Of The Tako Family Doing?
While I keep my eye on the money-side of things, handling the money isn’t the most difficult part of this lockdown. The really difficult part is keeping the kids occupied and minimizing our “cabin fever” while we wait for this lockdown to end.
It’s harder than you might think to keep two kids occupied when we can’t go anywhere!
For example — This week we did plenty of reading, but with the library closed we’re starting to run low on books. I guess I need to do some hunting for free e-books.
When the weather is nice, we try to get outdoors as often as possible. Tulips and other spring flowers are in bloom right now, making for some very colorful walks around the neighborhood this week.
To stave off a little more boredom on Sunday, Mrs. Tako held an indoor Easter Egg hunt for the boys! They had fun, but that was about as festive as we got this Easter.
If things start to get really dull, we break out a “new to us” puzzle. The kids just love puzzles and they make a great time killer. The boys finished a sloth puzzle this last week:
As always, making good food is another way we like to pass the time. This week we made homemade sushi! How many people can say they’re making sushi during this pandemic?
Our fish and topping options were a little bit more limited due to the lockdown, but I think we pulled-off a great sushi dinner. Here’s a shot of my homemade temaki just before I rolled it up.
The Road Ahead
While the road ahead remains unclear and fraught with uncertainty, I’m trying to look on the bright side — Families like mine are getting the chance to spend a ton of time together. Personally, I’m incredibly thankful for the extra time to spend with my boys (even if I’m terrible at homeschooling them).
It’s also an incredible reminder about what’s truly important in life. Take away all the events, dining out, vacation travel, sports, schools, and what do we have left?
Each other, mother nature, and (of course) the internet.
Yes, millions of people are unemployed right now, and what they’re going through is devastating. It’s tough times for many people, I can’t deny that. But it’s also tough times that pushed me to find financial independence, back in my younger years.
It was the kick in the financial butt that I needed to change my life.
Being forced outside of our individual comfort zone can be an incredibly good thing. It can push us to learn new skills, lose bad habits, and form good new habits. It’s not all bad news. There can be a good side to all of this, even if it’s challenging to see at times.
I challenge each and every one of you to find it. If you’re willing to share, I’d love to hear something positive that’s happened to you under this worldwide lockdown.
Leave a note in the comments below!