As most of you already know, the "15 days to slow the spread" was extended to 45 days. We're going to be in this “in between world” for another 30 days.
I just wanted to take one minute here and offer you some information about how we're thinking about this in relation to investing. I want to encourage you to please consider sharing this with friends, family members, coworkers who may be nervous about their own investments at this point in time. If someone you care about has questions about these things and wants reach out, we’re accessible!
There's really three things that we're looking at when it comes to how to approach Covid 19 on the financial side.
Protecting Cashflow During Covid 19
The first is to protect cashflow. If you have a need for cash within the next three, six, or twelve months, we need to protect that significantly. We need to do a good job making sure that money's available and protected from market volatility.
Rebalancing Distressed Assets
Secondly, rebalance. We've already rebalanced the accounts that we manage. So if we manage money for you, we've already rebalanced those accounts in most cases.
Rebalancing would be the process of rebalancing, reallocating from some lower risk investments with a portion of your portfolio into a higher risk investments at deep discounts right now. Typically these investments would be higher volatility, but right now they're at deep discounts, which creates the buying opportunity.
This is a good time to rebalance your 401k and you may have seen on a previous video from me why that mathematically makes sense.
Look for Unique Investing Opportunities
The third area we would recommend would be to look for opportunities. This could be either cash coming in from a bonus or stock grants that are vesting or something like that. We're looking for opportunities to put capital to work.
Looking for opportunities obviously would also include looking for areas of the market that should come back or should rebound relatively quickly. We would probably not call that airlines, cruise lines, things like that right now.
We would probably stay away from them because of the risk profile there. There's lots of other opportunities in the marketplace to pick up the distressed priced assets - not assets themselves that are distressed, but they're selling at distressed prices.