I’m going to let you in on a little secret of mine: every post I write I try to make as evergreen as I possibly can – meaning I don’t want my content to have an expiration date, or to become only relevant due to recent events. So it’s with somewhat hesitancy I even write this at all, but I do feel it’s applicable.
That said, possibly within 2 months, and probably within 2 years, you could substitute “COVID-19” for SARS, Avian, Swine, MERS, or Ebola and this post’s content will still ring largely true.
The recent global panic and epidemic over COVID-19 can serve as a teacher if we let it on a couple of areas in our life. And this teacher might not be saying anything new – in fact, the best teachers oftentimes don’t. They remind us of things that have always been true, we just happen to forget them over time.
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Personal hygiene
This somewhat sickens me that I even have to write this, but I was simultaneously dumbstruck and confirmed when I saw reports of how few of us wash our hands on a regular basis. Dumbstruck because this seems to be common sense that we’re all ignoring – global pandemic or not – and confirmed because I realize whenever I’m in a public rest room that half the men don’t seem to wash their hands after doing their business and it grosses me out.
Wash. Your. Hands.
Sure, do it after you use the bathroom, but even better do it every time before you eat, cook, and sneeze, and other times throughout the day. And use soap! And don’t do it like my 5 year old for all of 2 seconds. The CDC even has a guideline on how you wash your hands properly.
Related – if you’re sick, with the flu or anything else, don’t go around other people. Same for your kiddos. If they’re sick, don’t send them to school, to church, to playdates, to parties. It’s a personal pet peeve of mine, and I realize that there are circumstances that prevent people from having the flexibility of staying home and that we run the risk of disappointing others, but far too many sick people are out and about when they should be staying home.
We’re all connected
The very fact that a virus can break out in China and spread to the rest of the world within weeks shows what a globally connected world we live in. This is amazing in how far technology has taken us. Although our grandparents maybe could have flown to China or anywhere else in the world, most likely they didn’t unless it was a trip they saved up for over many years. Mass world-wide travel for the average family is a recent development. For good and for – well, ill – we’re all connected.
We’ve always been connected to some degree, but today that connection is more convenient and faster than ever before.
And just as humans are connected, so too are the global markets. I’m not an economist, but it’s pretty amazing to see how many comforts we enjoy in America (from phones to TV to prescription medication) have a supply-chain that stretches around the Earth. And while this has led to lower prices and more materialistic goods for us, it also means that when an economy on the other side of the world gets sick (literally and figuratively), their sneezing impacts our economy, and vice versa.
Markets go down
Eleven years from the bottoming out of The Great Recession, we’re on the fringe of seeing the first drawdown past 20% as measured by the S&P 500 index. It’s a healthy reminder to a lot of us – especially the youngest of us who have only seen largely upward moving markets in our investing lifetimes – that indeed the market can go down, in a scary, arms flailing, apocalyptical screaming way. It can be scary. Very scary. But this time is not unique. Based on the weighty evidence of history (which, full disclosure, is NOT predictive of the future), the market will eventually recover and reach new all time highs. It’s not a smooth, predictable ride, however. We should prepare for the turbulence ahead of time and buckle up. It’s one thing to read about choppy markets in the past and it’s quite another to realize them in the moment.
As a general rule, if you have funds that you need access to within the next 5 years (and some would argue even longer), those funds shouldn’t be invested in the market. Instead, they should be invested somewhere safer, which is far less exciting and is probably yielding you less money than you’d like it to be, but are generally going to be relatively sheltered from market turndowns.
Fear sells
We’re addicted to bad news, myself included. We’re hard-wired for it, because just like our distant ancestors, we’re constantly wondering if that rustling in the bush is a tiger waiting to pounce on us for his own dinner. Our ancestors needed this fear to stay alive, and rightfully so. Us – maybe not so much. Sure, there are things we should be rightfully aware of, but more often than not, the fear is overblown.
Want to do a quick experiment? Pull up Google’s search bar. Type in “Is it safe” and let it auto-populate and skim the results. I’ve been doing this over the past few weeks and the results constantly change and they kind of amuse me. Last week every single suggestion was related to travel. Yesterday it included “… to invest my 401k.” Just this morning “… to eat raw eggs” was the top result. My non-scientific observation is that we’re always fearful of something, and that something is changing on a day to day, hour to hour, and device to device basis. This quick Google experiment is a peek into what it’s algorithm is thinking we should be fearful of right now, or a synthesis of what others are currently fearful of.
Cable news, local news, social media, most newspapers – all of these outlets sell fear. Why? Because it works. If you take a look at the business model of any of these, it becomes more obvious.
How do they make money as an entity?
Advertising.
How do they convince advertisers to spend money?
An audience.
How do you get advertisers to spend more money? Grow your audience.
How do you grow your audience?
Make them tune in more and share it with friends.
How do you make them tune in more and share your content?
Create fear (and to a lesser extent, greed).
Keep them glued, keep their attention, keep giving them more – and then you can sell more advertising. As the old newspaper saying goes, if it bleeds, it leads.
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Look, I’m not downplaying the severity of COVID-19. I am, if I’m being forthcoming, questioning the overreaction to it from the public, but I recognize it’s a real threat. Real people are getting sick and its reach seems to be spreading. But I don’t think this is the end of mankind, that this is something we’ll never recover from, nor that this is something that spells out a global recession and a market crash. Maybe it does, maybe it doesn’t. That’s not my point.
My point is that we can use an event like this to (re)teach ourselves some truths that have existed long before – and will continue to exist long after – this current virus runs its course.
And the same truths will still exist during the next epidemic that will start up sometime after it.
Image credit: Photo by Roman Mager on Unsplash