What Keeps Me Up At Night
I don’t often write about the things that are bothering me. Not only do I hate being negative (there’s plenty of people out there who are) but it seems so trivial to talk about the concerns of one Michael Antonelli. 2020 has given us our fair share of things to lose sleep over so I thought I’d do a quick list of the topics that wrack my brain while I try to fall asleep every night. Here they are, in no particular order:
- Permanent job losses. When the pandemic started I had hoped we would get through it fast enough that the people who were initially laid off would find work quickly again but “permanent job losses” are growing. Bill McBride of Calculated Risk blog has a chart of them here (shows permanent job losers as a percent of the pre-recession peak in employment through the June ’20 report). These aren’t “furloughs,” these are jobs that are gone, pure economic damage. I’m hopeful that line bottoms out quickly and that it doesn’t get as bad as the GFC.
- A “Start/Stop” economy. Our economy will only truly recover to pre-pandemic levels once the virus is under control. If we keep doing this open/close/open/close thing it’s going to rattle the stock market and make our path to normalcy longer and more treacherous. Controlling the spread of the virus is how the economy wins.
- Clients that are completely out of the market. I worry about them a lot and I’m not even an advisor. There are always risks to investing, there are always “reasons to sell”. But an underappreciated risk is that you might outlive your money, especially in a world where rates are near zero. How do we help someone who is currently sitting in cash get comfortable with re-entering a diversified portfolio so they can reach their cherished goals?
- The Bond portion of a portfolio: To further what I just touched on, if you have relied on the bond portion of your portfolio for income what happens when its filled with instruments that yield 0.50% or 0.85% ? A 60/40 portfolio (for example) is going to look a lot different starting in 2020 than it did in the past. The last thing I’d want is clients reaching for yield in order to maintain income. This is really an important issue going forward.
- My back. Why didn’t someone tell me that as I aged I’d come to hate sleeping? When I was in college I could sleep 15 hours no problem, now when I sleep more than 6 hours my lower back feels like someone took a sledgehammer to it. Ugh.
- Losing touch with my teammates. Sure, I can chat with them on IM, I can see them on Zoom calls, and I can participate in a socially distanced happy hour. But I miss the days of stopping by their desk to tell them how awesome Disney is, or going to grab a SBUX, or bouncing an idea off someone in a hallway. I miss the collaboration and face to face camaraderie.
- School. Will it happen? Will my children be safe? Will one infection close down a school for weeks? Will my children get the same level of education if they have to do it from home again How can you not lie awake at night and worry about school?
- Having to wear dress clothes again. I looked at my work shoes the other day and laughed. Hey guys, remember me? Boy you sure have a lot of dust on you. My dry-cleaning bag could fit on the back of Santa’s sleigh and I dread the bill when I take it in. If my bosses sent an email “we encourage associates to wear athleisure” I’d be willing to take a pay cut (that’s a joke…)
- That this moment passes us by without any real change: Have we reached a tipping point? Are we being nudged? Whatever fancy term you want to use I pray that 2020 is the year that deep meaningful change finally happens and that we look back on this moment as a historical turning point for equality. To quote Hamilton: History has its eyes on us.
- That millennials never trust the stock market again. I know you’ve lived through two really bad crashes and two horrendous job markets but I want you to know that the World breaks all the time, the stock market crashes often, please don’t fall into a mindset that the World is out to get you. Having an investing plan and sticking to it is the key to reaching your goals especially during turbulent times.
But while these things keep me up at night they don’t diminish my long term optimism. We live in a world that rewards problem solving, grit, and resolve. The incentives are all there to figure this thing out – it will take time, sacrifice, and tremendous effort, but I think the case optimism always wins out.
Guess what, if you are waiting for the world to be calm, stocks to be cheap, the perfect political atmosphere, and complete certainty about the future before you invest then, my friend, you’re going to be waiting a very long time.
Build a plan, have a goal, find someone to talk you through the tough times, then spend your days doing what you love and ignoring the noise. That dear reader will help you sleep at night.