What are your thoughts when even Warren Buffet isn’t sure what to think!
Unemployment filings reached a plateau. Yet factories are closing, and companies are starting to file bankruptcy.
Imagine being buried in debt and then losing your ability to work.
Let’s say you have $200,000 of credit debt, and then all of a sudden you aren’t able to work. Then you get notice that you have access to more debt. Your lenders give you another $20k to add to your credit line so you have money to pay your bills while you are not working. There is a part of you that feels a sense of relief.
This extra debt ability has the illusion of giving you some financial breathing room, but sooner or later, the chickens come home to roost. In other words, that debt will still need to be paid back plus interest. Not including the cost of the adverse psychological and emotional effects of not contributing.
ReStarting will have its challenges. Some companies will fail and some will be restructuring. The ripple effect of a few struggling companies can be daunting for many because they are interconnected.
I predict we will be seeing cataclysmic effects from this massive disruption over the next several months and maybe years.
If you are ready to get into the stock market but don’t want to subject yourself to a massive loss, you can do so by dollar-cost averaging in.
Invest 10% of what you want in every 3 weeks or so. If things get crazy, you can then change your plan.
Dollar-cost averaging in looks a bit like this. If you are trying to get $500,000 into the market, you may want to consider adding $50,000 every 3-4 weeks so you are not over committing to the current prices.
This will give you the ability to adapt and adjust your plan as you enter into the market over time.