A sunny Sunday afternoon here outside of Denver. Warm enough that the kids have spent the better part of the day on their new joint-early-birthday-present trampoline (so far only one front-flip-induced black eye).
For me, I’ve spent the day intentionally avoiding the news, Twitter, all social media. I had a pot of coffee and my book and crossword puzzles and rode my bike. Vacuumed and did some laundry to boot. And spent most of the day trying to garner some perspective about what’s going on in the world and the markets.
The biggest realization I’ve had is how impossible this perspective would be to have come about independently tomorrow when the markets are open. Last Thursday the markets were down around 10% in a single day and everyone thought the world was ending. Friday we were back up about 10% by the close and the relief was palpable. But how much really changed in those 24 hours? I’m doubtful that the global economy was 10% different between Thursday afternoon and Friday afternoon. Could be. Probably not. Regardless, we have no chance to be completely calm and rational on a day like Thursday or Friday. Watching these huge numbers swing in the markets every day is an incredible tax on our mental/emotional resources. It is exhausting, full stop.
My wife and I were talking today about the sense of decision fatigue we have surrounding every activity right now. Should we take the kids to Dairy Queen or not? Let the neighbor kids come over to play or not? Go on spring break or not? Take the oldest to her orthodontist appointment this week or not? We are fumbling in the dark trying to make the most reasonable/appropriate/responsible decisions all day.
I am honestly quite grateful that I have a simple investment philosophy. Invest on a regular basis. Let the portfolio’s allocation determine where new money gets invested. Take tax losses where available (and when markets aren’t swinging 10% every day). I have a playbook for the portfolio. I don’t have a playbook for making personal/relationship/family/social decisions during a flu pandemic.
It’s enough to be making up such a big part of my life as it comes at me. I don’t need to be making it up as I go for investing. I’ve talked before about how impossible it is to make decisions in the heat of the moment. We don’t function well in a heightened emotional state. Do yourself a favor: if you have any decisions that you might think you need to make about your investment portfolio, do it before the markets open tomorrow. Or better yet, take a 24-hour hiatus from news, markets, noise, social media, commentary, opinions, speculations, prognostications and give yourself some space. Then make a decision as needed.
Bason Asset Management 