COVID-19 Market Volatility

Posted on LinkedIn 3/16/2020

I’m in awe of this MADNESS in the markets. I think I share the common refrain that nobody saw this crash coming. Maybe a 5-10% correction, but over 30% since the peak?!? The market always finds a way to humble us when we least expect it. I’m sure some fund managers who expected a correction have also been surprised by the sudden correction.

It is safe to expect, in the long-term (who knows exactly when), we will be back to normal. But in the short-term, this market is almost not investable and will have lasting, damaging impacts that are TBD. Buying on the dips doesn’t work at the moment, because the up days are followed by much bigger down days. Unfortunately, I can attest from personal experience!

This will pass, and we will learn a valuable lesson from this Black Swan event. Better to save your bullets for the confirmed rebound when we get a better sign what’s the impact of this virus. Resist the urge to catch a falling knife, in this case, a falling machete. Position your portfolio to hold a significant amount of cash and relax at the beach. Since we can’t go to the beach, perhaps watch some Baywatch on TV in some beach shorts. Be safe everyone.

#markets #investing #crash #blackswan