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:
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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.
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