As a country, it feels as if we are standing in the boxing ring, gloves dropped, taking body blows and headshots one after the other and the referee is nowhere in sight to stop the fight. We are deliberately crashing the economy, purposely causing pain, dislocation, and anxiety in an attempt to save the most vulnerable among us from the permanent state of death.
We are facing unprecedented problems both short-term and long-term. In the short-term, many people have already lost their jobs or have to contemplate the very real possibility that they may lose their jobs in the coming days or weeks. Nothing focuses the mind like the prospect of being hanged in the morning and for these people it feels like they are desultorily shuffling toward the gallows, waiting to see if the hangman’s noose falls on their shoulders or they are allowed to melt back into the crowd. All the while, they are attempting to concentrate on the litany of problems they know, or strongly suspect, they will face. Will I have a job next week? Will I have to move? How will I pay my bills next month? How about the month after? What do we do if someone in the family gets sick? What is my family going to do if I get sick?
In the long-term, we’ve just witnessed the obliteration of nearly four years of gains in the stock market. We appear to be attempting to make A bottom in the market, but it won’t be THE bottom.
This isn’t just a problem for the rich; it’s much more of a problem for the middle-class. This affects 401(k)s, state, local, union, and corporate pension plans, IRAs, education funds, charitable endowments. No one weeps for the wealthy when they take a hit, but how do you comfort the middle class couple in their late 50s who now have to face the prospect of working another four years just to make up lost ground?
Our hearts and thoughts go out to everyone bearing the burden of this crisis, whether medically, financially, psychologically, or in combination. Our fast-paced world just got a lot slower. Take that time to strengthen family bonds. Call an old friend you haven’t talked to in a while. Spend time with your children and help them discover the beauty of the natural world.
This crisis will pass and our lives will return to normalcy, but it may be a new normal that we hadn’t planned on three months ago. There’s not much to be done in the near-term. Use common sense, look after your health and your family.
On a longer time horizon, there is something you can do, with rewards far more tangible than the encouragement and well-wishes of people you don’t know.
You can invest in yourself and seek the education and experience you need so that your life and the well-being of your family is never at the mercy of the economy and the markets. You can learn to trade the markets or you can let the markets trade you. The choice is yours.
This crisis didn’t matter to the market until it suddenly did matter. You had one day’s warning – just one day, Friday 21 February, 2020 – to adjust your portfolio from net long to net short, or even just to go to cash, in order to save all the gains of the past four years. That was the day we went net short.
Wealth is its own vaccination against times of crisis. It’s hard enough to build wealth in this world. It is worth knowing how to keep it instead of relying on the supposed competence of others.
You are the only one who has a vested interest in your wealth. In the coming days, look to your health, look to your family, but when you have a moment, start to educate yourself on how to manage and grow your wealth. The most important thing in building and keeping wealth is to have a plan, but most people don’t know how to make that plan.
In light of these times, Maverick Trading is offering free access to both our Stock/Options and FX Division Training Programs. Just visit either www.mavericktrading.com or www.maverickfx.com and click Apply Now. When you complete the process, one of our recruiters will grant you access to our programs for 14 days. This is our gift to you to help you educate yourself on how to avoid this pain in the future and recover what you’ve lost in this crash. We have quite a bit of confidence in it since this is the same program we send traders through prior to them trading the firm’s capital.
In closing, stay healthy, stay safe, and take heart that this will pass and we will all emerge stronger for the experience.
Maverick Trading Management