How is everyone planning to invest in the coming COVID months?

[Swansong]

It seems like a fair number of travel companies (i.e. air and cruise lines) are down 60+ percent due to the COVID-19 situation.

On the extreme end, United Airlines (UAL) is down around 70% and has fallen to a P/E ratio of 2.11. I feel like travel has to return to somewhat normal after the virus has run its course.



What do Mustachians think about dollar-cost averaging into an ETF like JETS right now vs. following a more traditional index fund strategy (e.g. a three fund portfolio of US Stocks, US Bonds and International Stocks)?

Would also love to hear about any other strategies that people are considering.

[dandarc]

On the extreme end, United Airlines (UAL) is down around 70% and has fallen to a P/E ratio of 2.11. I feel like travel has to return to somewhat normal after the virus has run its course.

But, will UAL go bankrupt before that happens. There is definitely risk there.

Any new money coming in tagged for investments for us is going to index funds, like always. I am trying to scare a few more bucks up though.

[Swansong]

On the extreme end, United Airlines (UAL) is down around 70% and has fallen to a P/E ratio of 2.11. I feel like travel has to return to somewhat normal after the virus has run its course.

But, will UAL go bankrupt before that happens. There is definitely risk there.

Any new money coming in tagged for investments for us is going to index funds, like always. I am trying to scare a few more bucks up though.

That could happen! Picking individual stocks does seem pretty risky.

I'm thinking an ETF would be better because even if UAL goes bankrupt, it's unlikely that all the other airlines in the ETF would go bankrupt as well.

[Steeze]

As tempting as it is to stock pick right now - still just going for the standard index funds. Sticking to the IPS for the most part, but I’ve stopped buying bonds at this point, I’ll let it drift down and will trade the bonds I do have for stock if we continue to drop.

[Buffaloski Boris]

Planning to buy equities.  Lots of them. 

[MMMdude]

Airlines will either go bust or be bailed out and diluted to hell.  When do you think people will be comfortable to fly again....could be years

[The_Big_H]

It is quite possible that airline travel could not return for a very long time.

Consider who travels:
1) Business travelers, and now we got businesses all over the world who are about to unwittingly discover that their employees can do just as much work at home via skype/telecommute/email/video/zoom/whatever.  No reason to meet face to face with a client when you can video conference them in.  Saves a lot of money, avoids risk.

2) Tourists.  Not going to be a lot of that when you have a lot of people struggling to pay their bills.  Plus again the whole fear of a "relapse" will probably persist for awhile.  Turns out you can look at a bunch of neat places on google earth (someone needs to invent 3D live travel, I'm thinking like rent a robot/drone to go exploring around some place while you sit at home in an immersive 360/3D environment.

Entirely possible we have hit peak airline.

Stick to your initial plan for investment that you came up before everyone started foaming at the mouth.

[MaaS]

My concern with airlines is that the equity will get wiped out as a bailout condition.

If you're looking to invest outside of the index, why not go with quality? Google and Berkshire for example. Both have been drug down with the market but their businesses are rock solid and are sitting on a mountain of cash.

As a speculative play for the bold: Roku. It's one of the few businesses that will probably beat estimates because of the Coronavirus. It's also set up to benefit from a recession (cord-cutting accelerates, ad spend shifts to smaller, digital buys).

[Bloop Bloop]

Am staying on the sidelines for now, but will be looking to pick up retail stocks and distressed properties.

[Jack0Life]

It is quite possible that airline travel could not return for a very long time.

Consider who travels:
1) Business travelers, and now we got businesses all over the world who are about to unwittingly discover that their employees can do just as much work at home via skype/telecommute/email/video/zoom/whatever.  No reason to meet face to face with a client when you can video conference them in.  Saves a lot of money, avoids risk.

2) Tourists.  Not going to be a lot of that when you have a lot of people struggling to pay their bills.  Plus again the whole fear of a "relapse" will probably persist for awhile.  Turns out you can look at a bunch of neat places on google earth (someone needs to invent 3D live travel, I'm thinking like rent a robot/drone to go exploring around some place while you sit at home in an immersive 360/3D environment.

Entirely possible we have hit peak airline.

Stick to your initial plan for investment that you came up before everyone started foaming at the mouth.

I have to disagree.
Once its over, people will travel just the same.

[Radagast]

401k, HSA, IRA: No change, I was always aware that these things happen and we will continue to max them out and fully invest as usual, many automatically. For around the next five years gigantic crashes are still mostly beneficial to our investment plans.

Taxable accounts: I'll be "value averaging" a goal of $4,000 per week into stocks. I expect to put about $40,000 back. If a longer and deeper plunge than that emerges I would have to do a consultation. If we decide to not buy a house in theory we could dump $4,000 back in every week for several years which would be hugely advantageous, but that is unemotional me speaking. But I would beg to do it, including crawling around the floor.

My job is likely to be resilient to this. DW is in healthcare and so is financially "antifragile" to COVID-19, in other words the worse the virus spreads the more money she can earn.

[hodedofome]

This will wake up the last of the businesses that were using on premise software because they didn’t want to go to the cloud. Cloud software providers will benefit from this as long as we don’t go into a depression.

AMZN, MSFT, GOOGL,RNG, ZM, BILL, CRM stuff like that.

[TheAnonOne]

Bought a house last fall, so I will probably lose on the value if the housing market goes down now.

That being said, we will buy every week or two with our maxed 401ks / IRAs/ and HSA. On top of that brokerage with extra cash. We can push some 60-100k a year into the market with income alone. The only downside to that approach is if the recovery is too fast. At this point, I think we will have the time.

[dougules]

I'm not changing my plans in any way, buying mutual funds with any spare cash the same as last year. 

[BobTheBuilder]

I am going to buy ETFs with everything I don't need and don't give to those in need.

NASDAQ100, MSCI World BioTech and Healthcare, MSCI PacificExJapan, Europe, and India.

Diversified over several continents, focussed on the megatrends health and tech, light on carbon.

I do not think this is the bottom yet, but it hardly matters, since the bottom will be infinitesimal short and who knows at what stock market level.

I am not euphoric however about low prices. This is not a funny random crash.
The virus will pass, but only after it wreaked havoc on life and business.

Please remember to go out enjoying life when quarantine time is over. I know this is the mustachian board, but we are spending exactly zero on fun right now. Not less like han everyone else as in normal times, but zero.

[Mighty-Dollar]

NOT in cruise ships! That's for sure. That business is going the way of blockbuster video. How many times do people need to get the message that when someone gets sick on a ship, damn near EVERYONE on the ship gets sick.

I'll remain in broad market bond and stock index funds like VOO and BND.

[BicycleB]

I will invest by using my laptop to send occasional remote instructions to an investment account.  :)

FIREd; will probably just rebalance a little. Sell enough from a bond index fund to buy a bit of stock index fund, presumably.

***

I daydream about pulling off some crafty specialized investment but luckily am too clueless and chicken to actually do it.

A really wild move would be go earn some extra money to invest. Guaranteed positive return!

[gaja]

Index funds.

[the_fixer]

Same as it ever was...

Bi weekly purchase was able to buy me 25 shares of fxaix and 52 shares of VTMGX.


https://youtu.be/5IsSpAOD6K8


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[MustacheAndaHalf]

I invested heavily today in risky stocks, racing to buy before Congress passed relief legislation.  My portfolio was previously much like a 3-fund passive index portfolio: bonds, US, international.  Now it looks more like:

65% index funds (US/international)
25% actively picked
10% bonds (half short term, half long-term

My plan over the next several months is to wait.

[PDXTabs]

VT, every two weeks, just like always.

[fairfaxbiker]

I invested heavily today in risky stocks, racing to buy before Congress passed relief legislation.  My portfolio was previously much like a 3-fund passive index portfolio: bonds, US, international.  Now it looks more like:

65% index funds (US/international)
25% actively picked
10% bonds (half short term, half long-term

My plan over the next several months is to wait.

Why change your strategy now?  Did something fundamentally change?  I'm upset that my VXUS has sucked so bad and thankful for my BND allocation right now....VTI is still looking good and wondering if I should sell BND and move to VTI to take advantage of this quick drop?  Or then should I also be questioned for not sticking to my 60% US/15% INTL/25% BND strategy?

[the_fixer]

I invested heavily today in risky stocks, racing to buy before Congress passed relief legislation.  My portfolio was previously much like a 3-fund passive index portfolio: bonds, US, international.  Now it looks more like:

65% index funds (US/international)
25% actively picked
10% bonds (half short term, half long-term

My plan over the next several months is to wait.

Why today when the market is up around 9%?


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[Steeze]

Sold 25% Bonds yesterday after we crossed the -35% threshold from The Top, bought 50/50 US/INT. Will trade another 25% if we cross -40% at some point in the coming months. Still lots of bad news ahead of us.

[Jack0Life]

I invested heavily today in risky stocks, racing to buy before Congress passed relief legislation.  My portfolio was previously much like a 3-fund passive index portfolio: bonds, US, international.  Now it looks more like:

65% index funds (US/international)
25% actively picked
10% bonds (half short term, half long-term

My plan over the next several months is to wait.

Why today when the market is up around 9%?


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I agree. I was very hesitant to buy when its up 11% today. I bought a big chunk yesterday and got rewarded today. I think the BIG jump today was the anticipation of the stimulus bill being approved. It did not but those guys are just ironing the small details. I don't sense as big a jump tomorrow even if it finally get approved. Today was for that.
I did move a little more to Index funds today, $15k. Move some more over to treasury bonds.
Even if it did get approved, it will still take them 2-3 weeks to distribute the checks. Maybe longer.
During that time I don't think the market is going anywhere.

[2Birds1Stone]

doubling down on ETF's @ SP 1550 and DOW 12k

[Jack0Life]

doubling down on ETF's @ SP 1550 and DOW 12k

WOW !!!!

[MustacheAndaHalf]

Why change your strategy now?  Did something fundamentally change?

The media and markets convinced me they couldn't predict COVID-19, while my predictions about it have worked.  The markets are broken - just look at why the Fed intervened 3 times in one month.  When that panic subsides, there won't be any opportunities.

Just because I do it, doesn't mean others should follow.  My approach being 80% passively indexed, if anything, should tell you we're in 80% agreement for our portfolios.  Similarly, I'm comfortable with 50/50 split of U.S. / international.  That's too much for most people, and I typically suggest 20-40% international, even though my allocation is higher.

Why today when the market is up around 9%?

Do you stop dollar cost averaging when the market goes up +9%?  I bought during a day the market was rising, just as most people do with dollar cost averaging.

Worldwide stock markets are down by 1/3rd.  Historically markets return to normal.  If you combine just that information, you can make a +50% profit.  Purchase Vanguard Total World, literally the best diversification in the world, and earn +50%.  Or markets never return to normal... and forums about early retirement are probably gone, too.  :)

Keep in mind if stocks are at 67% of prior levels, multiplying by 1.09 boosts stocks back to 73%, or only a +6% gain relative to their original levels.  And if I bought in before +9% (I did), it's an even smaller gain relative to normal.

[American GenX]

This thread seems mostly redundant to the existing thread:

https://forum.mrmoneymustache.com/investor-alley/coronavirus-what-are-you-doing-with-your-investments-401ks/

I'm still waiting for the market to hit bottom.  Sure there was a short-term pop today based on possible stimulus, but I fully expect it to be short-lived, and the market will continue it's dive to lower depths.  At some point, I will rebalance.

[the_fixer]

Why change your strategy now?  Did something fundamentally change?

The media and markets convinced me they couldn't predict COVID-19, while my predictions about it have worked.  The markets are broken - just look at why the Fed intervened 3 times in one month.  When that panic subsides, there won't be any opportunities.

Just because I do it, doesn't mean others should follow.  My approach being 80% passively indexed, if anything, should tell you we're in 80% agreement for our portfolios.  Similarly, I'm comfortable with 50/50 split of U.S. / international.  That's too much for most people, and I typically suggest 20-40% international, even though my allocation is higher.

Why today when the market is up around 9%?

Do you stop dollar cost averaging when the market goes up +9%?  I bought during a day the market was rising, just as most people do with dollar cost averaging.

Worldwide stock markets are down by 1/3rd.  Historically markets return to normal.  If you combine just that information, you can make a +50% profit.  Purchase Vanguard Total World, literally the best diversification in the world, and earn +50%.  Or markets never return to normal... and forums about early retirement are probably gone, too.  :)

Keep in mind if stocks are at 67% of prior levels, multiplying by 1.09 boosts stocks back to 73%, or only a +6% gain relative to their original levels.  And if I bought in before +9% (I did), it's an even smaller gain relative to normal.

Well if you were racing to beat congress and time the market all I was saying is that yesterday or last week was a better time to time the market.

I guess that is the tricky part right


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[MustacheAndaHalf]

Why today when the market is up around 9%?

Do you stop dollar cost averaging when the market goes up +9%?  I bought during a day the market was rising, just as most people do with dollar cost averaging.
...
Keep in mind if stocks are at 67% of prior levels, multiplying by 1.09 boosts stocks back to 73%, or only a +6% gain relative to their original levels.  And if I bought in before +9% (I did), it's an even smaller gain relative to normal.

Well if you were racing to beat congress and time the market all I was saying is that yesterday or last week was a better time to time the market.
I guess that is the tricky part right

I was racing the realization that testing has grown exponentially in the U.S. and could lead to dramatically bending the curve.  I started buying last week - only over the weekend did I decide to have an active/passive split.

My timing had more to do with T+2 settlement than Congress.  After buying ETFs aggressively Thursday (Mar 19), I waited 2 business days for purchases to settle at the close of the market Monday (Mar 23).  The market open on March 24 was the first time I could sell anything from those ETFs, and turn part of my portfolio active.