Bullish, Bearish, Perplexed, Doesn’t Matter — Stay In Shape

We’re now going through the hard part of the stock-market crash. The relentless downward momentum has eased and we’ve even seen some rallies, not to mention, indications, that the coronavirus curve, is, in fact, leveling (see, e.g., the New York City epicenter). But bear market rallies are real things, so it’s hard to say the market is out of the woods.

Even if we are past the peak in terms of infection, we don’t yet know how lasting the economic damage will be. Some areas will probably snap back and go on to bigger and better. Others may be done once and for all. What’s an equity investor to do? I can’t give you a confident answer regarding the market’s next three to six months. But I can confidently suggest that whether you’re bullish, bearish, or on the fence, you absolutely positively need to stay “in shape” and ready to get back in the game; if need be, own and manage a fully-invested “paper” portfolio.

Keep at it

Sometimes, it’s easier to recognize things we should do if we see similar ideas applied in another discipline, one we can view more dispassionately than our own. In this regard, I’ll quote Greater Philadelphia Athletic Performance Coach Matt Zubak, who minced no words telling local high school football players who dreamt of moving on, to refrain from using the Coronavirus quarantines as an excuse to just chill: 

“If you show up in the fall and you're out of shape, you’re slow, you’re weak or injured because you’ve been sitting on the couch all this time feeling sorry for yourself blaming the virus for why you’re not in good shape, no one’s going to care. Your high school coach doesn’t care. They just think you’re not prepared. College recruiters and scouts aren’t going to care because there’s other people that are in phenomenal shape and have done phenomenal preparation. . . . This situation . . . cannot be an excuse to not do any work.”

Analogous to the scenario Zubak suggests to his audience, at some point, tomorrow, next week, next month, whatever, the stock market is going to become buyable. Maybe it will be a v-shaped snapback. Maybe it will be a new-normal growth rate from a newly established long-term base. Either way, if you’re not prepared to be 100% invested in your normal risk-based equity allocation, Mr. Market is not going to care and will be perfectly content to see countless others move forward while you get left behind.

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