Outlook for April 2020

What a difference a month makes. March 2020 was complete mayhem as all markets (stock, bond, currency, commodity markets) whipsawed day after day. The equity markets saw one of the fastest bear markets recorded as markets sold off aggressively and seem to have recovered a bit. Suffice to say, there is plenty of confusion on the future of the economy as we are in the midst of a recession, possibly even a depression.

The panic has gripped the central banks as well. Central bankers around the world have cut interest rates aggressively and unleashed QE programs while governments have picked up the pace on fiscal stimulus to complement the monetary stimulus.

On a personal front, I had the fortune to take some money off the table early enough after I realized that this was not a normal dip. I did initially think that this was a “buy the dip” opportunity in late-Feb, but when I saw the first panic rate cut from the US fed on March 3rd, I pivoted and started selling. All sales have been captured in #1 and #2 here. Thanks to those sales, I have done slightly better than the major indices with my portfolio YTD -9.6% (compared to -19.6% from S&P 500).

Outlook for April 2020

As of April 1st, our portfolio is only half invested with a heavy tilt towards bonds, utilities and gold. The other half is in cash and I will be happy to sit on the sidelines until I see extremely good valuations available or overall calmer markets. Meanwhile I continue to monitor closely some of the companies that I have my eyes on for the next cycle.

Portfolio as of Apr 1 2020:

Looking for investment ideas? Check out this Top Investment Picks for 2020, where 30+ investors present their top pick and a reason to invest in those securities.

What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Share with a comment below.

Full Disclosure: Our full list of holdings is available here.

4 thoughts on “Outlook for April 2020

  1. Congrats on getting out early enough. With 50% cash, you are poised to make some huge gains in the long run.

    I’ll be very curious to see how many of my holdings can maintain dividends during the next 3-12 months. Holding seems okay if you are dripping, but if everyone cuts…i’ll probably be wishing I had sold off some too…haha

    So far I’ve been pretty lucky – I’ve been out of oil & gas for years…and have only had 2 cuts (and 1 raise)….*fingers crossed*

    • Good to hear that you’ve been out of O&G. Ive been a bagholder in KMI and stuck with it. I almost sold it a couple of months ago, but didnt pull the trigger on it.

      Looks like a lot of dividend cuts from various sectors coming in…esp the high payout ones…will be interesting to see how deep this recession goes. All indications seem to point to a pretty nasty one. Looking for deeper discounts on some of the growth stocks Im eyeing these days.

      R2R

  2. Shows you how crazy times are when cash is looking to be one of the better places to park your assets. I hear you on waiting for the dust to settle a bit. I don’t think anything is baked into the market these days even though we already know Q1 earnings will be terrible and so will Q2. When companies report we’ll continue to see lower lows. Eventually, the volatility will subside. Keep an eye out for that return though.

    • Agreed…objectively looking at the valuations, things are still pretty lofty, where they were a year or year-and-a-half ago. Seems like most investors are hoping this thing will blow over in a couple of months and then its business as usual. I remain wary of that.

      cheers
      R2R

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