A Lesson In Adaptability
The totality of the Coronavirus event has disrupted just about all aspects of regular, everyday American life. The way we work (for many of us) has been altered, how we think about getting essential items has been altered, how we exercise has been altered (if you go to a gym), if you spend time volunteering that has probably been altered, the manner in which we have fun has been altered, no sports is especially difficult for me and I know there are others.
It is also likely that the way we think has been altered. If you were dismissive of preppers (the type who have years worth of food and other essentials) then you are probably less so now. Maybe you're more open to keeping an extra week or two's worth of food on hand for example. There will be other things related to where and how you live that you might think about and plan differently for. Living semi-remotely, we have an ATV that we use primarily for plowing snow in the winter. Anyone with an ATV likely has one five gallon gas can and while getting gas has not been a problem, maybe it makes sense to have two five gallon cans or maybe three.
Luckily, I have been able to work out at the firehouse, we have some dumbells there and between them, a jump rope, pushups and a spot for dips, I can get a pretty tough work out done. If exercise is a priority then maybe you've figured out a way to make due too. Maybe now you're thinking about a more permanent way to work out at home.
If you are working from home because of this event, is there visibility for this to become a permanent thing or a thing where you now work from home for two days per week or three and go to your office the others? If so, what changes would you need to make?
One thing we had planned to do this year before the virus hit was to upgrade our generator. We have a portable generator that might hold two gallons of gas and will run (loudly) for a little while which is helpful but not very efficient. A few days ago, in the middle of this we had a 12-13 inch snow storm and for quite a few people up here, the power was out for a couple of days. We just got lucky on this go around that ours stayed on but a more robust generator would obviously make power outages much easier to endure.
This sort of beefing up is not about extreme preparation for a post apocalyptic outcome it's about being able to avoid having to go do a bunch of errands when you'd rather not do so to avoid a very inconvenient outcome. I do not want to wait in a line that wraps around the Costco for an hour to get in.
This is also about adaptability. Can you function professionally in a very different environment (if that pertains to you), can you figure out a way to get a work out in, can you adequately fill your grocery cart when half the shelves are bare? Fill in any other areas that pertain to your lifestyle.
The investment application to this concept is pretty important and something we've all been reminded of lately. For many years now I have said that these events are all the same, we know what happens, we just don't know how long it takes. At some point this event ends and the stock market will recover. As I've also said, if you don't believe that then you should sell now and never engage in markets again. That would be financially ruinous for many people and lead to nine kinds of regret at some point in the not so distant future.
Basic personal finance says you should have some number of months worth of expenses set aside. The number is up to the individual of course but the concept is relevant for everyone. If you've set aside an adequate number of months' expenses then there is no need to sell this decline. In keeping with the theme of this post, maybe you'd have felt better prepared if instead of three months' worth of expenses you had six months or nine months' worth.
It is also possible that you've learned something about your tolerance for risk and/or volatility. The time to adjust an asset allocation is not after a large decline while emotions are running high. If right here right now you think to need to adjust your asset allocation, wait until we've clawed back some of this decline, remember how you feel now and then make changes after the eventual recovery.
All of the above lifestyle examples will make navigating extreme events like what we're currently going through easier and also make you more resilient in the face of more local and merely very inconvenient events. The above portfolio strategies will make navigating extreme financial events easier and make you more resilient that way too.
This is a difficult time but we can make it less difficult by focusing on how to make ourselves more resilient on all fronts. I think greater resiliency leads to greater adaptability which then leads to better outcomes and less disruption in future events be they big, national events like the Coronavirus or local like a power outage that lasts for a week (we've had a couple of those since we've lived here).