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April 10, 2020
I couldn’t help remembering the last time I felt so helpless – September 11, 2001. The country was frozen – trying to understand the level of hatred it took to plan and execute the death of so many innocent lives. The uniqueness of about sharing a seminal event together as a country is unique – some remember the assassination of President Kennedy in much the same way.
The next significant event that shook the country was the recession of 2007 – 2009. It seems like a slow drip, drip, drip of bad economic news, and I recall during the first year, having a bit of hope that we just might pull out with just minor damage. Investors reacted in many ways – some holding on, hoping things would recover, and others moving to cash and swearing they would never buy stock again.
However, September 11th affected me almost immediately. My position in a Chicago based strategy firm for all intents and purposes ended, and I now had to find another way to provide for my family of five. It became personal to me in a way that the recession of 2007, and the current Coronavirus has been for others.
This time, it feels different – the chief cause is not that the economy is failing (that is the result), but that COVID-19 has destroyed our ability to both carry on our usual lives and the commerce that is created by that normalcy. The result is record filings for unemployment and the unfettered desire for the Federal Reserve and Congress to do whatever it takes to mitigate the slide of our GDP to trigger another recession – no matter the future consequences of deficits stacked to the heavens.
Perhaps the only silver lining to all of this economic disruption is that we all in it together, internationally speaking. You would think that our government’s insatiable appetite for spending without regard to fiscal restraint would send the dollar spiraling out of control – au contraire, it is at a 15 year high against the Euro, and has posted near record highs against the Chinese Yuan, the Russian Ruble, and the Mexican Peso, among others. Evidently, to the world as well as for our families, safety (or perceived safety) is always first.
Despite the uncertainty of when the worst will be over, we must move forward; after all, we Americans prefer to be called optimists, especially those that self-direct their investments. Perhaps our clients feel that no matter how bad the economic environment gets; their odds are a little better when they choose to operate in a world of private investments. In any case, we are one day closer to the day we want to retire, if we are not there already – so what is the next move to make in your retirement plan?
I am grateful, first of all, that a self-directed retirement plan means that we have complete control of our investments – not our advisor, or someone to whom we must pay a fee or a commission for their recommendations. Here are a few things that we can do during the uneven days ahead:
We are all thinking a bit differently. I have a friend (yes, a Millennial) that continuously recommends that I keep a portion of my cash in Cryptocurrency – and for the first time, I am starting to take this seriously. Precious metals, based on the fragility of world paper currencies, are also starting to make a bit more sense. Investments in basic housing, multifamily and single-family, sustainability, small houses, agriculture and aquaculture, international driven investments, and so much more may be a more rational choice now than pre-COVID-19.
Don’t be discouraged or overwhelmed – saving, planning and self-directing your investments for the rest of your life is a serious undertaking. It’s well worth working on, and whether you want to self-direct a portion of your funds or all of it – you will certainly care about the outcome more than anyone else!
Glen Mather, CEO