I have significantly reduced all my positions on the public market. I am almost completely in cash and I am waiting.
Millions of Americans and Canadians have lost their jobs in the past 2-3 months but the stock market continue to recover and rise. Nation wide protests in the US every single day, curfews set every night but the stock market does not give a shit and continue to rise. The disconnection between the stock market and the real economy is most pronounced in the rise of the market. At present, we have no good answer. The only answer I have is the stock market is ruthless and emotionless.
As always, I cannot predict the direction of the stock market over the short-term. However, I firmly believe all of us should be invested in the stock market with our long-term capital. Investing in the stock market is still alien to most of my co-workers. From my co-workers’ perspective, the idea of investing in the market is plain nonsense. I find this to be deeply problematic. But in all frankness, I don’t blame them. Our public schools fail us when it comes to educating us about personal finance. However, they need to understand money is important and not have biased feelings towards money.
I vividly remember one of the nurses at my workplace criticizing me because I said money is important in life. She accused me of being selfish and “money-centered”.
This is unfair.
This is an unjust stereotype.
You can say whatever you want. Oh my gosh, money is evil, money is not important, money does this, money does that, money does not make you happy, money does not solve all your problems. Sure, money does not solve all your problems but money does solve all your money related problems. That is the fucking truth. All of us have some kind of money related problems whether it be your mortgage, rent, car payments, credit card bills, Toronto Hydro bill, Enbridge bill, Costco bill, your student loan, your line of credit (LOC), et cetera. Money solves these problems. Look, my health, my mom’s and dad’s health, my happiness and my relationships are important. And they all come before money but money is right on top as well. When you have money, you are powerful. This conclusion disappoints many people but there is no justice in history. For more context, I suggest you read Sapiens by Yuval Noah Harari. It is an amazing book on the history of humankind.
We like to see underdogs win. I want to see underdogs win. However, look what’s happening with the stock market as mentioned earlier. The underdogs and the poor who don’t have the capital to participate in the market are left behind. Yes, the rich are getting richer and the poor are getting poorer.
Why I am Almost Completely in Cash?
I believe after the virus crisis is over, we will have an economic crisis. Of course, nobody knows. I have been wrong before and I could be wrong again. The future of the stock market is a fog. But, I am waiting in cash. I think this will be one of the few biggest buying opportunity of my lifetime. More importantly, I will be allocating most of my capital towards the technology sector. After watching the recent historic SpaceX launch, how can you not be bullish on science and technology?
What happens next is anyone’s guess. Everyone is guessing. Success is not guaranteed. Will the stock market continue to recover and rise or will it crash?
I don’t know.
I also share your thoughts about money as like it or not, they rule the world.
I also agree with what you said about our education system. They still follow the same schema with almost no purpose. Our life could be so much easier if we have this knowledge how to do personal financing. Maybe from the young age we could study market and uncover its hidden potential. We could learn, analyze and prepare ourself for better financially future.
Thank you Monika. I agree, economic incentives run the world.