Keep Calm and Sizzle On
Good afternoon, fellow bacon enthusiasts!
What’s on the menu today? 2 strips of steamy bacon.
Lesson of the day: tough times
Savory selections
Tough times
We’re experiencing some tough times, aren't we?
COVID-19 has introduced us to a world of uncertainty. Social-distancing, self-quarantining, “stay-at-home” mandates. That's bad news for the economy.
Companies are slashing their workforces. People are filing for unemployment in droves. In March, we entered our first bear market in eleven years. In April, while the stock market bounced back a little bit, (despite lingering uncertainty), a staggering 20.5 million Americans lost their jobs, bringing the unemployment rate to 14.7%.
Even though some states are reopening, our economy might be taking a vacation (stay-cation?) for the foreseeable future. It’s not the prettiest picture. Certainly not “hang it on the fridge” material.
As dire of a situation as it seems to be, I’m here to caution you - don’t panic.
Panic only makes things worse. It’s a strong emotion that leads to irrational decisions. Emotions and logic don’t always see eye-to-eye, so acting on panic isn't in your best interest.
Especially when it comes to money.
That’s why the motto for today is…
If you’re worried about your money or investments, don’t panic. Don't let your emotions get the best of you, even if you're struggling. Which can be a challenge, I know.
For people with uncertain income…
Now is the time to take control of your finances and monitor your spending habits. That might mean cutting out a few discretionary purchases or “wants” in your life so that you can focus on saving more.
Here are a few ideas…
Cancel or suspend subscriptions. I know, I know - this sounds crazy considering Netflix and Hulu feel like necessities right now. But do you really need three streaming subscriptions? The average person has three or four. Try suspending your subscriptions (you can find this option in your account settings) or cutting your count down to one to save a few bucks each month. FYI: Hulu offers a cheaper streaming option ($5.99) if you put up with advertisements.
Limit or eliminate online shopping (for now). Smartphones make it unbelievably easy to shop and buy with a few taps of our thumbs. In seconds, you can drop tens (maybe even hundreds) of dollars. Consider deleting these apps for the time being. What do you need new clothes for right now anyway? It’s not like we can go anywhere.
Learn to cook and buy cheaper groceries. Cooking is not only a valuable skill but also a much cheaper option than ordering dinner from DoorDash. As long as you can follow directions, you can cook.
For investors worried or confused about the market…
If you're confused by the market's sudden resurgence (despite that lingering uncertainty, a term I will continue to use), you're not alone.
Before we dive into that, let me say this: while global pandemics are rare, bear markets aren't anything new.
With that out of the way, what should we make of this weird market rally? From a short-term perspective, it's best to be cautious. Considering there's lingering uncertainty around COVID-19 and the world's grand reopening, this looks like an unsustainable bear market rally. At the very least, 2020 will be a down year from a broader economic perspective. It's not unreasonable to expect that lull to carry into 2021.
In sum: don't assume the toughest times are past us and it's smooth sailing from here on out.
From a long-term perspective, the stock market trends up over time - and has for over a century. Even if it's a bumpy ride for the next year (or three), it's safe to assume we'll recover down the road.
In times of hardship, it’s important to stay level-headed and as cool as a cucumber.
Keep calm, and sizzle on.
Savory selections
In case you missed it, I published a couple of relevant posts on Bacon Bits that may be helpful
If you want to cut back on bad spending habits or maximize your savings each month, check out this post - How I Cut My Monthly Expenses By 32%. I walk through the steps I took to adjust my lifestyle and retake control of my spending.
If you want to start investing and take advantage of the down market, check out this post - How to Take Advantage of the Down Market Before It Rebounds. I share a few simple ways you can start investing.
Sinsizzly,
Carter Kilmann