March 2020 Updates & 401K Contribution

Wow, what a market! The best thing to do is to stick to your plan. Hopefully whatever asset allocation you are in is something that you can stomach for the next few years, as it might take that long for prices to “correct.” Now is not the time to sell everything.

Drops of >20% like this are not uncommon and the last decade plus has been an outlier. I was just finishing up medical school training when the Global Financial Crisis hit. Since I did not have much invested at the time, it really didn’t affect me too much. I have now been investing for about 10 years, initially on the resident’s and fellow’s salary and for the last few years as an attending. Most of the investing as been into equities (until recently).

The last month has been a roller coaster. Up huge one day and then record fall the next, followed by another huge up day. These swings have got to be influenced by algorithmic trading.

However, in the grand scheme of things, we’ll survive. We are hunkered down and avoiding public spaces. We are trying to support local businesses by buying gift cards for future use and/or ordering take-out/delivery from local restaurants. My business is slowing, like most all businesses out there, but we are reducing staffing, taking more vacation days, and at least maintaining salaries. The cuts in immediate K-1 distributions will be sad (I was expecting a nice chunk in April), but I just have to keep reminding myself that this will pass.

I am sitting on the sidelines with some money, which I got from selling Intel, Qualcomm, and Caterpillar stock before the majority of the crash. (I thought these would be hardest hit by their immediate ties to China.) I’m holding on to this to use for downpayment on our upcoming construction loan.

My 401k, however, is being put to good use and I have not slowed my $1625/month contribution.

Latest purchase has been an approximately 75/25% ratio of Cambria Global Value ETF (GVAL) and Newfound/ReSolve Robust Momentum ETF (ROMO). This is larger than the typical monthly contribution since it includes the profit sharing part of our 401k.

$28,463 for 1422 shares of GVAL (adding $874 in annual dividends)
$9,136 for 380 shares of ROMO (adding $231 in annual dividends)

I’ll provide an update at the end of this month with the forward 12-month dividend.

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