April 20, 2020
This past Saturday I drove down to Washington DC to pick up our daughter Rebekka. She is the manager and head coach of a CrossFit gym in the middle of DC. As you know, gyms were closed pretty early on to limit the spread of the Coronavirus. Fortunately, she was able to pivot to doing online classes with all of their members. I don’t think they lost anybody. In fact, they picked up some old members who wanted to reconnect to the gym.
So she’s been sheltering at home doing online classes and going bonkers! She recently decided to come home for a while to at least have some human contact. My wife and I have pledged that we’re not going to drive her crazy. And of course, we have to be on our best behavior around her at all times!
I was a little surprised on the drive down. There was basically no traffic, about what you would experience in the middle of the night. 90% of the trucks on the road were Amazon Prime. Signs everywhere said if you go into a service area, you must wear a mask. There were no toll collectors, all the tolls had to be paid by EZ Pass or toll by mail. Can you imagine being a toll collector at a time like this? You might as well hang out a sign that says “please, please give me Coronavirus.”
After the initial shock of working from home, it seems like we have settled into a groove. To me, it seems like our overall productivity has increased. We are getting pretty adept at using video conferencing. Last week, I was invited to five different Zoom meetings, including a high school reunion. We have now held meetings with accountants, with clients, with lawyers, and Association directors. We actually FaceTime with my 95-year-old father in law. It’s really not as good as being face to face, but it’s a thousand times better than a phone call. We have also used this opportunity to eliminate some inefficient procedures and to improve some levels of service.
When this crisis is over, I think we will be better and stronger as a result.
It is hard to know exactly what form the recovery will take. It certainly seems like the slightest bit of good news will give the stock market a boost. My view is the stock market will recover long before the actual economy gets back to normal. I still believe that the pandemic will drive permanent dislocations in the global economy. I’m sure that many companies will want to spread their supply lines out so that they’re not dependent on one particular country, especially if it’s China.
One major change is that sheltering at home has accelerated the adoption of video conferencing. When we moved into our new office four years ago, we built a very sophisticated video conferencing facility. We never used it once. Now we’re video conferencing daily on our laptops, tablets, and phones. I don’t think we’re going to give that up when we go back to the office.
My plan going forward is to video conference once a day with all of my clients, one by one. During our call we will:
- Review cash flow requirements.
- Rebalance portfolios by bringing them back in line with their target allocations.
- Consider buying stocks while prices are down.
- Scrutinize accounts for tax-loss harvesting opportunities. We can use these losses to shelter future gains and some ordinary income.
I know from experience, that these efforts add to overall portfolio results over time.
One of my bedrock beliefs is to focus on the elements that we can control and not worry too much about the things that we can’t control. Clearly you can’t control the Coronavirus beyond staying at home and using social distancing, but we can use proven disciplined portfolio management techniques that will add value in the future.
If you have any questions or concerns, please call me at (201) 618-8818.
CEO, CFP® Wealth Preservation Solutions
Personal Family Office / 360 Wealth Management