If you are an investor in the stock market you will likely have lost nearly one third of your portfolios value in the past ten days. Though this is nothing like the great depression of 1929, it is substantial enough to get everybody’s attention.
On Thursday I had a conversation with my investment advisor, not about the bloodbath on Wall Street but about another matter. He said he had already had a number of conversations with many of his clients who are uneasy about all this change, and who could blame them.
I can remember well what my friend, the late Lex Kunau, used to say when someone complained about how much they had lost in the stock market on any particular day. “What did you sell,” he would ask them, and their answer was usually the same. “I didn’t sell anything but the stock I own went down,” they would reply. Lex would then say, “You haven’t made or lost a thing until you sell,” and he was right.
There are investors who track the stock market a dozen times a day and when times are good they probably have a great attitude about investing for the future. My philosophy is more like my friend Lex, who was in the stock market for the long haul. Yes, there were always going to be periods of bull markets as well as bear markets, but the long-term direction has always been constant improvement year after year.
The Covid-19 Coronavirus is the cause of all this insecurity in the markets, or so say all the talking heads. The simple reality is that China is responsible for so much of the economic output of the world’s economy that when they tell their workers to stay home to prevent the spread of this new virus, it means that nothing will be manufactured, making it impossible for companies in the United States to replace product they have sold.
With little hope of a quick fix to this Coronavirus it is nearly a given that we will be in for some interesting days ahead. But before I go too far down this doomsday path I need to offer up a little hope.
Several months ago, while visiting my in-laws in Franklin County, Idaho, we experienced a power outage. Apparently a truck had slid off the road and had taken out a utility pole, cutting off power to the entire area. The irony of the situation was that there are three major power lines that bisect their farm, each one carrying enough electricity to power my in-laws house for a thousand years, but take out one strategically placed power pole and we were in the dark.
At the time we happened to be playing a card game, which is somewhat difficult to do in the dark. Thanks to technology, everybody had a cell phone in their pocket and within a few minutes we turned on the flashlight feature of our phones and we were back in the game. Actually, we did take a few minutes to round up some candles to save our phone batteries and it’s interesting what happened. We really had a lot of fun playing cards and visiting with each other by candlelight.
One total irony of that night was that just that day, while shopping at the Smiths Food Store in Logan, I had seen an eight pack of candles and for whatever crazy reason, I put them in my shopping cart. Imagine my delight to pull eight candles out to light up our game. Our cozy evening was hardly a hardship, especially since we knew that within just a short while the power pole would be repaired and the lights, and heat, would come back on, just like it always has.
But what if it didn’t go that way? Would we have been prepared to deal with a power outage for days, even weeks? How would we stay warm with no electricity to power the fan on the furnace? My in-laws do have a nice large fireplace in their kitchen and an even better wood burning stove in the family room in the basement, but they don’t have a stick of wood to burn in them.
Our lives have become so dependent on the modern luxuries of our time that few of us would have any clue what hardship would even look like. Just suppose this Coronavirus spreads across the world and it becomes impossible to leave your house for a month or more. Are you prepared for such an event? How many days would you make it with the groceries in your fridge or cupboards? What about medicine or other necessities like diapers and formula for your child?
I hope this virus surprises us by disappearing just as quickly as it showed up, but if it doesn’t, will you be prepared? Don’t panic, but perhaps the best thing you could do today is to give yourself a little self-assessment to see just how unprepared you really are. There is still time to get your affairs into order – if you want to be well prepared. Or you could just hope that the worst doesn’t happen, if you dare.