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:
…[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!
I did recently, shorter term, AD — bought puts — they made fun of me on the “Time the market?” blog entry.
As I said there, this is a new era. We will come out of this in the short term, but no more bullets for the FED. The game has changed.
At least we’re doctors.
There are always anonymous internet people coming out of the woodwork in a market down turn saying things like:
I went to cash last week
I’m short the market
I bought puts
but they never seem to mention it in advance, and even if they did they don’t come back when they’re wrong.
# 1 I don’t believe you and neither does anyone else
# 2 Even if you did, what good does it do you to come here and brag about it? Is this your way to deal with your own anxiety about the situation?
But no, this isn’t “different this time” nor is it a “new era.” I’ve seen this movie before. I know how it ends. And yes, it will end. Every bear is a little different, but they all end.
I put predictions on the other thread, Jimbo.
I’m interested (not a doomsayer , never been) … when in [modern] human history have central banks all had 0% or negative rates, or many of them monetize debt?
I’m waiting for your response, since I know it — but it seems you’ll brush off that fact, that things are in FACT different.
Every bear market is different, but they all come to an end.
I’m confident you already know the answer to your rhetorical question.
I agree with that. Yes, we both know. I am not your enemy here, just truly curious as to whether you have considered that “indexing” or rules based buying is a primary reason that the drop was this quick — and that no true price discovery has been doing on for 10 years due to many things, but mostly Central Bank policies and index investing (blindly).
I think you underestimate the effect of all those stock pickers, actively managed funds, and hedge funds.
I don’t think you’ve understood why the “don’t fight the Fed” endgame is the indexer’s peril. Buybacks might be gone … in which case … buy and hold means diddly squat
Fiat and confidence are now main stage. Both are going down. Sorry to burst everyone’s bubble. And let me tell you, I thought they would put this off another year or so.
You better hope they stop this nothing burger panic and get back to economic business or we’re looking at Japan part deux
“Nothing burger panic”? Seriously? What planet are you living on? “Get back to economic business”? It’s people that drive the economy and if half of us are dead from this stupid virus that’s going to hurt a lot more than shutting everything down for a few months so we can better manage it. Not to mention the incalculable human losses and family suffering that will result. What a naive statement.
Half of us aren’t going to die. But 1% is still a whole lot of people and there will be at least a massive short term worldwide economic hit from this. Not quite ready to say “we’re now Japan” though.
Yes, buy and hold is the worst investing strategy, except all the others that have been tried.
But your comment is a good demonstration of why staying the course is so hard for investors. Every time markets drop people like you show up and essentially call people idiots for following a very reasonable long term plan. They start doubting their plan and before they know it, they’ve sold low and locked in a financial catastrophe.
Great post helps every reader think about other things keep up the good work. We all thank people working in the health profession, it’s no fun at times like this.
Lucky for me I am retired having had 50+ years in practice thru all the many crisis and the bottom line is this will end and we will return to more normalcy hopefully smarter and better prepared for the next crisis we will face.
God bless you, us and the rest of the world !
RWW
You’re welcome. Stay safe. Your finances will be fine when this is all over so focus on your health.
I totally agree with you; while reassurances to not sell etc during such a crisis are welcomed, you’re spot on in saying you’ll keep doing your posts and let the Covid news come elsewhere. It’s so nonstop now we all welcome your usual topics. Keep on doing what you do.
I’ve been following your blog for almost a year now and still have lots to learn in the way of becoming financially literate. A few questions I had that I was hoping you’d be able to address:
1) When should we rebalance? I haven’t bothered looking at the small amount I have in my IRA because I’m sure the real number will look very sad. As of now, it’s split with 70 total US/20 international/10 bonds for index funds. I’m sure it’s out of proportion now. Should I rebalance it now? How often would you check and rebalance things in the current economy?
2) Any advice or new strategy for managing federal loans given the “0%” interest? Currently I’m on RePAYE. Should I be trying to pay more now?
1. Rebalance according to your plan. Your written plan should specify. It is usually either time based or percentage based. More details here: https://www.whitecoatinvestor.com/rebalancing-back-to-basics/
2. Yes, but I’m not sure how it is all going to shake out yet. Certainly staying in REPAYE is best for you. Don’t pay more if you’re going for PSLF.
Via email:
I hope that you have already received many supportive responses to this post, but I did want to add my voice.
All of your points are spot on, and I absolutely agree. I would argue that the calming and steady financial advice you provide will actually help those doctors who are dealing with the brunt of the COVID outbreak because it will (hopefully) help to dissipate the fears and anxieties they are feeling about the dramatic drop in their retirement and investing accounts. Hopefully this calming influence helps them better focus on the task at hand.
From my personal perspective, I am very appreciative to have a distraction from what feels like an onslaught of bad news, doom, and gloom. As long as it makes sense for you and your team please continue with business as usual. We all need some normalcy in our lives right now.
Via email:
I applaud you and the other medical professionals on the front line. My niece is a pediatric radiologist at Akron’s Children’s hospital and on Sat. they had enough PPE for a week – we need all of you to stay healthy. We are in this together.
I appreciated reading this.
Via email:
IMO your approach during this pandemic has been appropriate and appreciated. Thank you for what you do, have done, and are continuing to do.
God bless and stay healthy,
Via email:
Hi, Jim,
I am a pediatrician in ——-. Your work has helped me immensely over the last few years. I still have a lot to learn, but much more confident in my ability to learn it thanks to you.
I just read your most recent blog post about covid 19 and totally agree with your take– and just couldn’t help myself from writing to say thank you for your work with the blog and in the emergency room. And please take good care of yourself.
Sending you best wishes,
via email:
I really didn’t care for Finance over the years. Since I really didn’t know much about investment, me and my wife decided to pay off our mortgage, which we did within 5 years of buying our home. We also have maximized our 401 K & 457 B from the very beginning. Here they have their own in house financial advisers, who are employed by the hospital. They provide this service to all consultants. I was advised few years ago by this adviser to max out back door Roth and switch to HSA. We payed cash for both of our cars and raised several eyebrows! Few years ago, I opened brokerage account since we typically saved well and money was accumulating in our bank beyond our emergency fund. So, we haven’t done much apart from these above mentioned items.
At the end of each year, I reflect on my career, work, family etc. and prioritize what I want to accomplish in the New Year. I have always been a strong proponent of spending few minutes every Sunday reflecting on the week, this habit has served me well in my dual roles. This December, I committed myself to reading few pages every week related to Finance. My first book was Coffee House Investor. That book really fascinated me and I was all of a sudden really curious to understand and learn more. My second book was White Coat Investor. That was just a beginning. Over the last few months, I read your second book titled Financial Boot camp. I then went onto read ‘Little commonsense investing’ by Bogle. Currently in the middle of Bernstein ‘4 Pillars of investing’. I am now hooked! I drive 60 miles to work everyday one way, and have caught up on several of your podcasts. I have an opportunity meet with several new physicians joining the practice and will be sharing these resources with them. I agree with you that financial literacy and subsequent independence can only help with burn out!
In regards to your question in this blog, please continue to blog and do everything you have been doing. I am very new to this but can sense that many like me have not experienced bear markets before. We need more information, not less during this time. I agree, we all need distraction from the virus! I do want to THANK YOU for taking this on. You are making a huge difference to all of us. You made finance fun for me personally, so thank you!. You, through your book
Via email from another blogger:
thanks for this, guys. It reminds me that I’ll be best serving my readers if I do the same.
Via email:
Keep doing what you do, if nothing else focusing on #5.
via email:
Excellent column today Dr. Dahle.
Thank you for your ER work and your sagacious financial advice.
Be safe.
Via email:
Thanks Jim. Always appreciate the distraction and helpful information, please don’t on account of Covid-19. I’m fortunate enough to be in my 30s and experiencing this market. Losing $20k doesn’t seem so bad when you have 25-30 more years to go. And like you, sitting here in the pedi ED, volumes are indeed low and I have time to either stew in anxiety or hope.
I dunno if you’ve read CS Lewis quote on “living in an atomic age” but I think this portion of the quote is apropos to this topic:
“This is the first point to be made: and the first action to be taken is to pull ourselves together. If we are all going to be destroyed by an atomic bomb, let that bomb when it comes find us doing sensible and human things—praying, working, teaching, reading, listening to music, bathing the children, playing tennis, chatting to our friends over a pint and a game of darts—not huddled together like frightened sheep and thinking about bombs. They may break our bodies (a microbe can do that) but they need not dominate our minds.”
Via email:
This was a great post. Thank you! I forwarded it to so many friends.
Via email:
Thank you so much for this! 23 hours and 50 minutes a day of Coronavirus is going to break us all!
Via email:
Wow Jim thank you for this… level-headed advice is what America’s physicians all need right now…
even though my email was harsh I have been a dedicated reader/follower for many years I’m 39). I paid off my mortgage this year and my husband & I’s loans 2 years out of residency. We are in good shape to weather this storm because of your sound advice over the years. Stay safe, please and hopefully after 2-3 weeks of strict social distancing this will start to abate
I’m not sure 2-3 weeks is going to be enough. We may not even be at the peak by then. I think we’re in for a long Spring and Summer.
Via email:
Covid-19 Psychological Care
In times of added stress, uncertainty, and disruption to our normal routine, it is normal to feel unsettled and apprehensive. Our tendency is to focus on the stressor, which is usually something we can not control, therefore increasing our feelings of unsettledness. Just like there are things we can do to protect and minimize our physical exposure to this virus (i.e. washing hands, etc.), there are things we can do to protect and minimize negative psychological exposure as well. Here are a few that have proven to be helpful in times like these:
1. Limit amount of time spent watching the news. As tempting as it is to stay focused on the news 24/7, it is not a good contributor to our wellbeing. Get information from trusted sites such as the CDC and WHO, then turn your focus to meaningful activities such as reading a book, listening and/or playing music, watching a movie.
2. Maintain as much of your routine as possible – exercise (if not able to go to your regular gym, go for walks, running, bicycling, you tube exercise videos, etc.), regular meals (plan ahead to avoid stress eating), connection with others (phone, face-time, etc.), and staying with a regular schedule for sleep and wake up times.
3. Practice mindfulness – stay present focusing on right now. In times of uncertainty our thoughts tend to drift into tomorrow and worse case scenarios, which often make us miss what is possible in the present. Training our minds to be present right now helps us to focus on what is at hand and what is possible for us to do in real time.
4. If you have experienced past trauma or have suffered or currently suffer from an anxiety condition, you may experience a surge of related symptoms. Some helpful ways to reduce anxiety are:
a) Take a deep breath and practice a breath meditation. Here are a couple I find helpful:
https://www.youtube.com/watch?v=CQjGqtH-2YI https://www.youtube.com/watch?v=YFSc7Ck0Ao0
b) Accept that you are anxious – it is a feeling like any other and as such it can come and go. Observe it without judgment, knowing it will pass.
c) Question your thoughts – when anxious, our thoughts play tricks on us. Confront the thoughts by asking, “Is this worry realistic, is this likely to happen, what is in my power to do?”
d) Use a calming visualization. Here is one of my favorites:
https://www.youtube.com/watch?v=D9dY1zeX-EM
e) Use positive self-talk such as: “This anxiety feels bad, but I can use strategies to manage it”
By Herdley O. Paolini, PhD, LP – President of the Institute for Physician Integration & Nemours’ Children’s Hospital (Orlando) Residency Psychologist
Via email:
Thank you for what you do…and this email takes a great tone. And I am not even a Doctor…I work as a senior leader in the Hotel Industry, which is on its knees.
In any case, please keep publishing. If people don’t want to read it, they can unsubscribe.
All the best,
Loved this email. I think everyone can relate. Thanks for putting things in perspective. Obvious things, but sometimes we need someone else to say it to us for us to really let it sink in.
My spouse is an ophthalmologist in a private practice. We postponed elective cases and after tomorrow (urgent patients need to wait in their cars) will shutdown for a week and a half (next week was spring break for us anyway) or so to see how things pan out. It seems as if no other medical practice in our small city/big town is closing up entirely and we are hoping we are doing the socially responsible thing for our patient population and greater community, that we are saving lives and helping to #FlattenTheCurve. It is not easy to turn away staff at this time, but hopefully the Sweeping Relief bill can help out.
Can you find out more about the Sweeping Relief bill, how that will work, and financial advice for doctors and practice owners?
We love your blog and thank you for gathering and sharing knowledge, experiences and advice.
Anonymous
P.S. I wonder if this pandemic will be followed by a question similar to “Where were you … (on Sept. 11, when the president was shot, or during some other historic event)? Perhaps it would be “Where were you during the coronavirus pandemic—at home, work, or work from home?”
Great suggestion for a post. Will do when more information comes out.
Our Derm office is essentially closing for two weeks (others aren’t), so KEEP WRITING!!
Is buying the SPY now after the -10% days with the cash I stupidly had in cash for far too long considered ‘buying in a bear market’ (good thing) or ‘trying to time the market’ (bad thing)?
Thanks
If your plan says you are supposed to be fully invested, then I would invest it. If your plan calls for 10% in cash, then I would keep that in cash. Follow your plan. Don’t change horses midstream.
We can argue whether or not the conference should have gone on. I was honestly tempted to go since my Denver trip got cancelled last minute.
Getting to live stream your conference when I was hoping to watch the ACC basketball tournament was a much needed relief. It isn’t tone deaf to keep blogging in the middle of this. Heck, WWE is doing Wrestlemania without fans, and I’m tempted to watch it solely for the distraction. Sometimes, the show must go on.
From the financial side of things, I’m looking hard at refinancing again since student loan rates are dropping since I did it last one year ago.
Thanks to you, I finally have a written investing plan with a a reasonable asset allocation that I have been following for about 9 mos.
This is my first bear market, so I appreciate the reassurance to stay the course and keep investing. I am a little shaky on the details, but I feel prepared for this volatility, and again, that’s all thanks to you.
Please keep up the great work on WCI and at your ER.
You got this.
Dr Dahle. Following your advice I have finished paying off my Med school loans, fired my financial advisor and have gotten out of high ER funds with loads, started investing, backdoor rothing and now tax loss harvesting. It has been an incredibly liberating experience. People’s needs haven’t changed. They’re still going to need solid advice on loan repayment, investing, insurance, etc. you provide that. More now than ever, they need to stay the course. You remind them of that. The first California patient died a few blocks from my house. The fear is palpable at my hospital. I imagine that it may be similar where you are at. We need some business as usual and snarky dry humor. 👍
Nobody ever accused me of having humor at all.
Thank you for your thoughtful blog post — I’m glad you addressed the elephant in the room but also glad we can all move forward and (briefly) focus on something else.
It sounds a touch morbid, but thanks to your blog I have all the appropriate life insurance and disability insurance in place plus a will, and it really makes facing risk so much easier knowing my family will be fine in a host of worst case scenarios. When I wonder whether an n95 would be better than a surgical mask for coughing patients getting urgent procedures, I don’t also have to be terrified that my kids and partner will lose the house or never be able to afford college. “Financial peace” is a meaningful descriptor and makes it easier to focus on the real stuff. Thank you so much!
You’re welcome.
Anything but Coronavirus! I come here to get away from that.