Crash. Here’s What We Are Doing

At this writing, 8:24 AM Central Time on March 12, 2020, The SPY ETF (S&P-500) is down to where it was in JULY 2017 (and December 2018 during that mini-bear)! That’s more than 2 1/2 years of stock market gains wiped out in less than one month. Thankfully, we have plenty of cash with which to buy.

Yesterday, I sold the US treasuries because they were at all-time highs and primed for a pullback. Yesterday I began to buy back into SPY. Looking at things in hindsight, I was a day early. However, going into today’s open, we still had about 35% in cash. I’m buying more today. How many times do we get a sale on America’s best companies at the price they were selling 2 1/2 years ago?

Warren Buffet said to sell when everyone is greedy and become greedy when everyone is panicked (my paraphrase). Right now, everyone is panicked. I’m too scared to get greedy yet, but we are moving back toward a normal allocation to stocks. I’m also adding to our gold allocation. Gold was sold yesterday along with everything else but has held up remarkably well.

Here’s to managing risk. It looks stupid … until it looks brilliant.