“When fear becomes the reigning emotion, it causes an irrationality to take hold.” These are the words of Joseph Sangl, President/CEO of I Was Broke. Now I’m Not. and INJOY Stewardship Solutions. Today, Joe gave an incredibly informative Facebook Live presentation on the FACTS of the Coronavirus (COVID19) and the stock market’s performance.
Everyone should click https://www.facebook.com/iwasbrokenowimnot/ to view this session. You will find Joe’s words helpful and more importantly during these unstable times, comforting.
The following are 6 Things You Can Do To Better Manage Your Money During The Coronavirus And Stock Market Crash I captured from Joe’s incredible session today. Once again, click HERE to view. Watching the video will allow you to hear him unpack these ideas in greater detail. Now onto Joe’s thoughts:
Facts
- The “common cold” is a member of the coronavirus family. – Harvard Medical School
- Most, if not all, of those watching will survive the COVID-19 pandemic.
Mortality
- COVID-19 – 4,718 deaths worldwide as of the start of Joe’s talk (38 in the U.S.)
- Flu – 291,000 – 646,000 deaths worldwide (12,000 – 16,000 in the U.S.) – John Hopkins Medicine
Joe’s Rule For Investing
- If he needs money anytime in the next 5 years, he is going to save it. Need $ < 5 Years?: Save It
- If he doesn’t need money anytime in the next 5 years, he invests it. Need $ > 5 Years?: Invest It
Facts
- 95% of five-year periods in the stock market have made money.
- 100% of ten-yer periods in the stock market have made money.
- There have been 12 bear markets since WWII with an average decline of 32.5%.
- The most recent one was October 2007 to March 2009 when the market dropped 57%… It took four years to recover. But that’s less than five. The five-year period made money.
- Bear markets have averaged 14.5 months on average and have taken two years to recover on average. – CNBC 2/27/2020
Other Tips
- Dollar-cost averaging is the best choice for the average investor.
- It’s important to be diversified… An S&P Index Fund is a wonderful way to achieve diversification.
- You can get diversification through multiple stock investments.
- Mutual Funds, ETFs, and Real Estate are wonderful ways to be diversified. Small businesses and intellectual property are also great choices.
- “Warren Buffett Strategy” – 90% S&P Index Fund, 10% Short-Term Government Bonds
- Federal Funds Rate – Dropped rates by .50% in emergency action… They are purchasing $500 billion in assets over the next three months.
6 Things You Can Do
- Fund Your Entire IRA or Roth IRA
- Contribute to 529 College Savings Plan
- Purchase some favorite stocks
- Refinance debt as the rates fall (mortgage)
- Turn off the 24-hours news.
- Obtain information from CDC / WHO
What is one thing you learned from Joe which will help you navigate these difficult times?
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