I received this email yesterday in response to yesterday's blog post:
Is this a joke? Regularly scheduled programming while every physician is on the front lines of an all out war with COVID19?? My private practice anesthesia group is cancelling all elective cases….Cmon now….Either put it on hold or help
Typically 1% or less of people bother sharing the way they feel with me about a given post. So if I get one email, I assume there are 100 or more who feel that way. So I thought we would interrupt our “regularly scheduled programming” today to share a few quick thoughts and explain our plans for the next couple of months.
# 1 We Care About Your Safety
Unlike most posts (which are written months in advance) this post is being written the day before publication from an emergency department where I am working my first shift since things got serious in my city. Two emergency physicians in this country are currently critically ill with COVID-19, one in Seattle (younger and stable) and one in New Jersey (older and not so stable.) I cannot ever remember feeling so anxious to go to work as I did before this shift, and that includes my first shift as an attending. Please do all you can to keep yourself, your family, and your patients well. Know that we are thinking of you, praying for you, and perhaps most importantly, right here alongside you fighting against the pandemic. Thank you for what you do. The work you do matters. You have always known this, but events like this will remind the rest of the world. People in China are applauding the health care workers as they walk past their apartments to the hospitals each day to do battle. As we so often say to our warriors–
Thank You for Your Service!
# 2 We Can Only Read So Much About Coronavirus
I think I spent 6-12 of the last 24 hours reading about and thinking about coronavirus. There is nothing else in my email box, my social media feeds, or on the news. At a certain point, reading more is not helping, it just makes me more anxious. The Happy Philosopher explains it well:
I don't think you should ignore the news completely, but I agree that limiting your consumption is likely good for your mental health. In the coming weeks as we go from work to home (with cooped up kids) and back to work, my readership is not going to suffer from lack of information about coronavirus, but we are likely to seriously benefit from a little bit of distraction every now and then to get our minds off of the serious health, personal, and economic consequences that are occurring and are likely to worsen before they get better.…[Dr. Weil] had some interesting ideas, a few that sounded crazy, but perhaps the most fascinating to me was the concept of the ‘news fast’. Basically he advocated taking intermittent breaks or fasts from news with the idea that constant exposure to news creates stress, therefore lowering the effectiveness of our immune system and leading to a greater propensity for disease.
I kind of blew it off along with most of the other things in the book until years later, when a cascade of events rekindled the idea. Enter the economic crisis of 2009. I was entering a period of maximum work related stress and burn-out just about the time I was simultaneously watching 30% of my wealth evaporate. I was seeing a slow down or actual reversal of my work volume which I figured would probably translate to a lower income. I was consuming countless news stories about the end of financial systems as we know it. Peak oil was threatening to end civilization, politicians were never more partisan*, danger was everywhere. I consumed this negative news with the zeal of a heroin addict looking for his next fix. I was checking the stock market and spot gold prices daily. I ordered a three month supply of Dungeons & Dragons style iron rations which would feed my family through the inevitable disruption of social order.
I felt terrible all the time. I was worried and anxious; the stress felt like a thick fog everywhere I went. Maybe I really was safer, but it sure didn’t feel that way. Then I just stopped and paused. Some part of me dug way back to the idea of Dr. Weil’s news fast and I asked myself two important questions. Was my consumption of news helping or hurting me? Was any of it actionable?
Answer: It was absolutely hurting me. Little, if any of it was actionable. In fact, looking back in the rear view mirror, consumption of news has hurt me in the aggregate. It has led to poor decision making. Overall it has been destructive to my emotional health and taken time from more productive activities…and it is doing the same to you.
There is no doubt that personal finance and investing are not the most important subjects in the world, but that isn't new–it has always been like that. The material on this blog and podcast will not be coronavirus-focused over the next few months. That is on purpose. It isn't that I am not thinking about it. It isn't that I lack the ability to come up with a coronavirus angle on everything I write. It is a deliberate decision to offer you a break from what you are doing the other 23 hours and 50 minutes of your day. Take what you find useful and leave the rest.
# 3 Many of My Readers Are Less Busy Than Usual
As I mentioned, I am sitting in an emergency department right now. There are no patients here. My partner saw no patients overnight. Our volumes are down dramatically. We are not alone. Even in Seattle, emergency department volumes are down 25%. I guess it turns out that all those patients weren't so emergent after all. Many clinics are closed. Elective surgeries are canceled. The fact remains that many, perhaps even the majority, of my readers are less busy than they were two weeks ago. You're not all infectious disease specialists and intensivists. Some of you are dermatologists and attorneys and small business owners. All of your non-work activities have been canceled, and many of you are out of work. No kids' sports. No bar crawls. No March Madness. Can't go to the gym. Movie theater is closed. Your vacation is canceled etc. You have time to learn some new skills and gain some new information. For many of you, the next few weeks will provide you an opportunity to become financially literate and put a financial plan in place for the first time in your lives. I don't want you to miss that opportunity.
# 4 The White Coat Investor Feeds a Lot of Families
There are five families who depend on The White Coat Investor, LLC for a large chunk (the majority for most) of their household income. WCI is also a major referral source to dozens of other businesses who in turn have families who rely on them for their income. As other business owners know, that responsibility is not one that we take lightly. If we are able to work safely, we will continue to do so.
Luckily, all members of The White Coat Investor staff have a home office. This entire business has always been run from home. Our biggest challenge in the coming weeks will be getting our work done while keeping the kids from killing each other. Certainly, that will affect our productivity, but we certainly won't be “putting it on hold”. Even with all of us continuing to work just as much as usual, we still expect a drop in business revenue of 75%+ over the next 3 months for various reasons. Luckily the business has no debt and even some cash reserves that should be able to tide us over and allow us to make payroll during these trying times. I fear that many businesses in the world are not in the same position.
# 5 The Need is Great
As I write this, the stock market is down over 9% today and down 28% from its recent peak. This is the bear market I have been warning my readers about for years. For many of you, this is the first time you have suffered through the loss of real money that you invested for your future instead of spending on a new car, a kitchen renovation, or a Paris vacation. We will be here to reassure you that while every bear market is different and our crystal ball is just as cloudy as yours, we've seen this movie before and we know how it ends.
This is the time to stay the course and follow your reasonable, written financial plan. No, you should not take your emergency fund and invest it in stocks to take advantage of a “bargain.” But neither should you be afraid to rebalance and continue to invest for your future as per your routine. The money you invest in the coming weeks will have the best long-term return of any money you invested for the 5 years before and after this event. As Shelby Cullom Davis said, “You make most of your money in a bear market, you just don’t realize it at the time.”
Readers will need reassurance not to sell low (like three of my partners who did so near the market bottom in 2008 only to need to work a decade longer to recover from that mistake). Those readers who have not gotten around to putting a written financial plan in place will now feel more impetus to do so. Some will need to learn how to tax loss harvest. Others will be more convinced of their mortality and more willing to buy that insurance and do that estate planning they have put off. Let us know what financial subjects you would like to see on the blog and podcast in the coming weeks and we'll interrupt the previously written and scheduled content to meet you where you're at.
So my dear reader, in this trying time know that we are here thinking about you, praying for your safety, and working hard to serve you just as we always have. Do not assume that just because we are talking about silly stuff like the stock market or budgets that we do not know there are more important things in life. Hopefully, you will find the information we provide in coming weeks to be useful in your life (or at least a healthy distraction.)
What do you think? Is it appropriate for bloggers and podcasters to talk about anything but the pandemic right now? Should they quit publishing at all? What would you like to see/hear on the blog/podcast in the coming weeks? Comment below!
We follow The White Coat Investor to get better at investing. It is not offensive to find you are blogging about finance on your financial blog. Keep on keeping on.
Thank you for your kind words.
Soldier on WCI!
WCICON was an amazing experience. A roomful of investors who didn’t much care that the market was down (and then up!) 10% a day because they are long term investors! At most financial conferences, hair would be pulled and gastric ulcers would bleed!
Similarly, an appropriate tone was set for Covid-19. Daily reminders for social distancing and hand hygiene, and then on to the program of the day.
This is how life will be for the next many months to come. Soldier on Jim with the excellent (non-Covid) content!
Thank you for your kind words. Glad you enjoyed the conference. We tried to balance a lot of competing interests last week. A bit of a no-win situation, there was going to be someone mad at us no matter what we did. We did the best we could with the information we had at the time decisions had to be made.
Please continue with your content!
Not only do I agree with what you said about people needing financial advice more than ever but I certainly think that we also need some distraction from talking about COVID-19 100% of the time.
Thank you for all that you do!
Thank you for your kind words.
Please continue to post non COVID-19 material. I go back to work in a few days and I just woke up from a nightmare. In the nightmare I saw a patient positive for COVID -19 and was told after leaving the room that I had the wrong PPE on. I woke up, checked my email and was happy to see your blog post. I am desperately searching for something else to read besides COVID-19 updates or news. Thank you!
I know how you feel. I ended up sending off two coronavirus tests during the shift yesterday when I wrote this post. I came home and dumped all my clothes in the washer and took a shower before seeing anyone in my family or touching anything else. I know some emergency docs who are literally camping in the garage for the duration of this and not planning to see their kids at all.
I think this was absolutely the best way to address the current situation/climate. Thanks for all that you do and know that your advice is greatly appreciated by the vast majority of us no matter what some might say. Keep the faith and cheers!
You’re welcome. It’s amazing how hard it is not to panic when facing something so unprecedented isn’t it? Even though we all know it is the right thing to do.
I have a lot of portfolios with money in the fuzzy situation of a “closet” index fund. The ER is not extremely high, and the turnover ratio is not extremely high. But, there (were) large unrealized capital gains. It has been a nice corollary to be able to get the client out of these lower quality funds into a pure product with a negligible ER and low turnover ratio. Just about all clients have had the appropriate response as you outline above, but one client could not take it and sold out! Boy, does that hurt me to the core. They asked Dan Ariely, a cognitive psychologist from Duke, what he does during market fluctuations like these. He adopted a TPP approach outlined at WCI CON. Dr. Ariely types in his password three times and locks out his account on purpose so he cannot look at it. The motivated audience member should re-read the qualified dividend rule (60 days) posted a couple of weeks back before she rebalances. I would also refer the reader to FI physician’s elegant article on the virus; I liked the one about what the virus wants.
Thanks. One question is how to approach tax loss harvesting at this time. I did a bit a few weeks ago and now the market has gone down huge again. Can I sell the same shares I just bought and buy something a little bit different or does that cause a wash sale? And if so, does it make sense to wait to TLH when the market is not shifting 5-10% a day?
Also budgeting is going to be key since I bet many of us are going to earn less this year. So thanks for continuing on that theme.
Yes, but beware the 60 day rule discussed here:
https://www.whitecoatinvestor.com/the-60-day-qualified-dividend-rule/
Thank you for this post!
You’re welcome. Stay safe.
I do not have a disabled child. I would never buy whole life insurance anyway. Normally I would skip or at most gloss over your last post. However I read it because I needed the distraction.
People will find a way to complain about anything as I am sure you already know. Keep the posts coming!
Thank you for your work on the front line!
You’re welcome and thank you for your reassuring words.
Keep up with the distractions and the great job you usually do. We all could use a COVID-19 break (as my autocorrect just capitalized and added-19 for me) and we are only in the beginning stages of this marathon.
Yes, this will be a marathon, not a sprint. We’ll remember these next few months for the rest of our lives.
Thanks for all that you do Jim, on the front lines fighting Covid-19, and with this financial literacy website.
While I read your point “don’t sell, don’t read all about Covid-19,” I think this offers a wonderful, real-time, educational experience for proper diversification. Revisiting topics like your post on “Dual Momentum Investing” (which would have exited all equities end of Feb, now saving 20+%, and who knows how much more moving forward), or my post that I wrote on diversifying with managed futures (my trend following fund is up over 70% in the last 6 weeks alone), may be worthwhile. There are diversifiers that consistently do well during periods like this (as they did in ’08 as well), and some readers may find that interesting to highlight.
Anyone who advocates anything besides buying index funds can just wait until the next bear market (every 3 years or so on average) and then tout how brilliant they are. Gold, cryptocurrency, all bond portfolio, whole life insurance, or whatever. It’s especially rich to come in and say “I avoided all this and got out of the market long before it began” rather than posting in real time. Maybe you did, maybe you didn’t. More likely, you’ve gotten out multiple times before and it didn’t pay off so you didn’t come in here to post “Yup, that plan I was following was a big loser, I just thought I’d stop by to let you know.” I distinctly recall you saying you were going to keep readers up to date when you ran those posts, but it looks like you really meant that you were only going to come by when it served your purposes to market your funds.
If you could make 70% every six weeks you would already own the entire world.
Thanks for sharing your opinions. It’s just nice to see that a few of your prior posts, about how to avoid market collapses (Dual Momentum), and diversifying with managed futures, explain strategies that are acting extrmeely well, and exactly as they were designed, during this crisis (as they have all prior recessions as well). Whether people want to believe the century of data, and now more data points during this crisis too, in real time, is up to them. Wish you well navigating this crisis.
Ah WCI, the Voice of Reason. Thank you for this post, you nailed it. I can only consume so much coronavirus news before I head off to work each day to get my temperature taken upon arrival at my facility and practice medicine while staying 6 feet away from everyone around me. The financial content reminds me that life goes on and we need to keep planning for our future no matter what that looks like. For us that means starting a real estate coaching program tonight and beginning to actively scout for multifamily properties to buy by the end of this year. The goals remain the same, it’s just that now we are pursuing them while avoiding social activities, coping with a teenager who is stuck home from school and isolating my chronically immunocompromised husband who I have forbidden to leave the house! Stay safe everyone.
You’re welcome. You stay safe too and I hope you find the bargains you’re looking for.
Just started following the last few weeks. We Max our 401ks and have a rental property, but now need the next steps to which avenue we should invest. I feel exactly the same way about COVID-19 information. I have never been a stressed person, hospitals usually given me comfort, but I am becoming anxious and questioning every move. I need a reprieve from it! I want to learn the art and skill of investing, thank you for your help!
I would start with getting a written investing plan in place. No time like the present.
https://www.whitecoatinvestor.com/investing/you-need-an-investing-plan/
I don’t have life insurance or a will yet.
I’m in NYC, so am worried about our risk of Covid-19 and my husband has asthma and coronary artery disease.
If my husband and I just write down our wishes on paper, including advance directives….does that hold any weight God forbid we become seriously ill with this virus?
I’m sure it holds some weight, but why not just do it the right way? At a minimum you can do the online will and advance directive services.
You can also apply to get insurance. It can all be done on the phone and online aside from a quick paramedic physical, and they’ll come to your house to do that.
Bravo!
Keep safe. I will keep reading your blog and enjoy the distraction.
You too.
Excellent post and thanks for all you do for our community.
You’re welcome.
Please keep posting! As you said, “we know how this movie ends”. So, in the interim, we should all practice medicine to the best of our abilities, but also keep living our regular lives. This includes pursuing non-COVID-19 activities. Thank you for your hard work and hoping you and your staff stay healthy.
Yes, moderation in all things. Just because we are social distancing/quarantining doesn’t mean we have to think about/talk about coronavirus 24/7.
Please keep posting.
Please encourage readers to “stay the course” and “not panic”
Years from now, we will pat our backs for doing so.
Our everyday job, we try our best to do what we can.
Our finances – we still have to take care of it.
Thank you. I will.
Jim, I’ve been a long time reader and listener and strongly support your core mission and philosophy. While I don’t need clinical/epidemiological info on COVID19, I think it’s a missed opportunity to not actively discuss it’s implications and our approach to personal financial. This was the first post I’ve read in awhile bc the rest just don’t feel pertinent to what I’m feeling in these times of uncertainty. Like the emailer, I’ve been disappointed in the lack of acknowledgement of the surrounding pandemonium and it comes off as tone deaf. Additionally your response is disappointing, Jim telling us how to consume news and information, while I don’t entirely disagree, comes off as condescending. If I need a distraction, I’ll Netflix, exercise, or do whatever else I typically do to “shut off”. I come here to get up to date personal financial information and ignoring the COVID pandemic, it’s economic impact and thus our impacted personal financial situations just sounds out of touch. Today’s post was much appreciated as it was the first time you addressed this pandemic and the strategies for us as investors (stay course, don’t invest emergency funds, etc) which may be simple and stuff you already preach, but is more important to hear now than ever. I’d imagine if I’m feeling this way, there’s a number of your readers/listeners who are feeling the same. I’m not telling you how to do your job, and again I love what you do for our community, but I want you to realize the impact you’re having on some of your base.
Sorry it took so long to write this, we’ve been rather busy the last month or two and especially the last week putting on an event. This is the first blog post I have written in months. Remember much of my content is written months in advance. Even podcasts are generally recorded 1-4 weeks in advance. There is just no other way to coordinate the efforts of so many people and without those people, there would be dramatically less content coming out of The White Coat Investor. To be fair, my content manager did move a few posts around to be more timely, like these recently republished posts:
https://www.whitecoatinvestor.com/should-i-try-to-time-the-market-friday-qa/
https://www.whitecoatinvestor.com/the-benefits-of-a-fixed-asset-allocation-portfolio/
and the one that was going to run today but we pushed back to make room for this.
In addition, I updated this post that ran last week to reflect the effects of this bear market:
https://www.whitecoatinvestor.com/my-index-fund-performance-report/
Although the market drop has been precipitous, the peak was only 3 weeks ago and they were this business’s busiest three weeks in the last two years. It only entered bear market territory a week ago and I was a little busy in Las Vegas at the time. I did put out a lot of content on social media from my phone as best as I was able to reassure my followers, but it’s hard to put out hourly updated content on youtube, a podcast, a blog, a newsletter, twitter, instagram, facebook, pinterest, and forums all at once while my entire staff is running a conference. If you want my latest thoughts on anything, I’d suggest Twitter.
Apology if I came off harsh, I appreciate the content you produce, thanks for the hard work.
Keep the contents coming! We need this now more than ever!
We will.
“Even with all of us continuing to work just as much as usual, we still expect a drop in business revenue of 75%+ over the next 3 months for various reasons.”
A little surprised at this for what is primarily an internet based business. Just being nosy.
Care to elaborate?
No, not really. But just as an example, I had a major advertiser email today to say he wants to push back his advertising campaign back two months. A recession affects us all, including doctors. I know lots of docs who are expecting a dramatic income hit after having to cancel all elective surgeries or run clinic by telehealth only.
Congratulations on pulling off a successful conference. Stay safe in the ER.
Hey Jim,
Very much appreciated this post. I’m a resident and part of my anxiety over the last week has been watching the stock market crash and wondering if the future that I’ve now invested years and thousands of dollars into will dissipate into nothing. And I’ve got kids/spouse/parents counting on me.
Some concrete questions I’m hoping you/the community can address:
-has the calculus around residents buying a house now changed since interests rates are plummeting? I’d be a first time home buyer without any savings to use, and there’s a chance I move out of my city within 2-3 years.
-what about privately refinancing my student loans? I’ve been planning for PSLF with a total of 5 years for residency/fellowship. Should I now try to take advantage of lowered interest rates?
Good suggestions for a post or posts.
If you have cash, now is a great time to get good deals on just about anything–houses, cars, stocks whatever. But I still wouldn’t buy a house until my personal and professional life were stable, and by definition, the professional life of a resident (and often the personal life) isn’t stable. If you know your job is going to change in three years, you’re probably not going to come out ahead buying a house, no matter what the interest rate is.
Great time to take advantage of low interest rates, especially for private loans. I’m still trying to figure out what the president’s statement about waiving federal loan interest last week means, but that might provide a reason for people to hold off for a little bit refinancing their federal loans, but not too long. They certainly want to refinance before rates go up and that might be while they still have 0% federal loans. At any rate, no, you certainly shouldn’t refinance if you want to go for PSLF. Once you do, your loans are no longer eligible for PSLF. If you will be directly employed full-time by a 501(c)3 for the next 5 years and have eligible loans, go for PSLF, no matter what interest rates are.
Will you be reaching out to the student loan partners to see how they are handling this and/or updating their rates? I want to refinance again, and I keep doing soft inquiries but nothing has changed so far. THANKS!
I’ve heard back from one but they’re still deciding.
Nice! Glad to hear that you can stick by your sensible plan!
Curious if your strategy in this was to purchase puts to protect your positions. It seems “everyone” was doing it (though I strongly doubt it, and I sure as heck didn’t because I didn’t know enough about options at the time).
I have a mortgage I can afford on 30% less than what I made on my prior salary. We have a 6 month emergency fund we’re not touching yet and we can batten down the hatches to make it last even longer if we need it to. I plan on loss harvesting periodically through this process and have some cash for investing. Yet I’m still financially anxious. It’s kinda weird.
Thanks for posting and keeping on about the sensible stuff. We’ll make sure to use a few links of yours as we need them!
No, I don’t buy puts…or any other options. No, everyone wasn’t doing it. Their crystal balls are just as cloudy as yours.
I feel anxious too as our personal situation is in a bit of a perfect storm (tons of expenses due over the next 30 days, massive hit to the portfolio, and every source of income we have taking a massive hit). My wife keeps reassuring me that we have enough and this too shall pass. She’s right of course, but when you combine financial anxiety with the anxiety of going to work to take care of patients with a virus that we know way too little about, even those of us without a predisposition to anxiety are getting to learn a little empathy towards those with clinical anxiety.
Jim, I do not find it annoying or inappropriate. Keep doing what you’re doing. You’re being true to your passion and followers. You also helped answer a question I had about my own blog. Thanks, David
Thanks for your kind words. This too shall pass.