Intro
What’s going on with this stock market right now? The results are not matching up with the current state of the economy. There’s a pandemic. People are losing their jobs, millions are unemployed, companies are closed down. No real end in sight. Yet, the stock market is going up? This just doesn’t make sense. And this is coming from someone who has a bull mindset. A large portion of my money is invested into stocks. I don’t feel right about this quick rebound.
The Markets
In late March when the virus was really hitting its stride in the US, businesses, schools and sports all shut down. Sending the Dow Jones from over 30,000 all the way to 18,000. Being prepared for these moments are important. I wrote an article about how I planned for a moment like this. I also wrote about how I don’t want to splurge all at once because I don’t know where the bottom is. But then the market started going immediately back up after that. We are already back around 24,000. The S&P 500 P/E ratio is at 21 and that’s just too high. Carnival Cruise is shut down, yet their stock is going up. Delta Airlines is still grounded, and their stock is going up. Companies are laying off workers, restaurants are closed. Unemployment is suppose to get worse. Is this the time for a V shape recovery?
My Plan
Although stocks are still below their 52 week highs and all time highs, I do not trust this market. I started to buy stocks on the way down and planned on doing more buying. But not now. Not now that the market has gone back up so quickly. Staying put and playing the wait and see game sounds like a good plan. I already have money in the stock market. I’m not going to put more and chase any stocks right now. I just feel like there has to be another dip. The market is going up right now on hopes and dreams that the economy will get back up and running again sooner than later. But even if businesses started back up tomorrow, this is still a massive hole to get out of. I will continue to keep a solid amount of cash on the sidelines because in my personal opinion, we are not out of the woods yet.