This month of March 2020 has been quite unique for me. First, we saw the fastest bear market for the stocks in history. At the time of writing this article, the S&P500 has gained more than 20% from its current bottom making it the strongest stock market increase since the Great Depression. Also, for the first time in my life, my employer has put me under partial unemployment.
Cash accounts: + 1’497 CHF
This number is inflated as we did not contribute to our 3rd pilars this month to not have it automatically invested in the stock market for the same reason with our Investement/Brokerage account. Deducing this amount would end with an increase of 397.- in cash. Again, a few expenses I did not plan that I am now keeping track of such as paying for your annual car taxes or SERAFE (TV rights tax). The goal is to have a better benchmark for next year.
Brokerage account: 0 CHF
As mentioned during our last episode, I sold all our positions with a plan to observe the market during April earning season and re-assess by the end of this month.
P2P Lending – Mintos: +4 CHF
Well I saw some disturbing emails with regards to increase of delayed payments which I expected. Let’s see how our investment strategy using only loans with buyback guarantee will evolve under the current situation.
2nd pilars: +2’341 CHF
Nothing unexpected also. I estimated the monthly contribution from our part and employer part and will adapt them on a yearly basis. I don’t expect a significant change considering the relatively low exposure to stocks from both our 2nd pilars investment strategy.
3rd pilars: +0 CHF
As mentioned above, we did not contribute to our 3rd pilars this month to not trigger the automatic buy order into our fund with our bank.
Total Wealth Increase: +3’838 CHF
To conclude, a normal month. Our savings rate is still above 20% which is not awesome. We are putting some thinking into it for next year.
Food for thoughts
I am very surprised by the rebound of the stock market. I was very close to send a partial buy orders to start layering my entry but decided to follow my plan. The price of my ETF of choice is still below to the price I sold.
I read some articles which highlighted that the stock market usually start its rally 3 months before the end of a recession. But I am not confident in the recent surge as it has been fueled by centra banks and governments pouring money like never seen before. Initial earning reports are not catastrophic. However, I believe we have not seen the real economic impact. Earnings for this quarter were barely impacted by a decline of overall consumption from the world and represents also a lot of “done deals” made earlier.
The plan from European governments is not showing a fully open economy before the end of summer, with still strong measure in between practicing social distancing. Plans are based on capacity to test on scales unprecedented and tracking population. I have my doubts on those.
Stay safe everyone and have a great week.