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What I’m Doing With My Portfolio During the COVID-19 Pandemic
What better to write about than this? Here is what I’m doing during the COVID-19 pandemic and its associated market volatility.
Sticking to My Investment Plan
Whether you are a do-it-yourself investor or use a financial advisor, everyone needs an investment plan. Otherwise you are just playing G&G, guessing and gambling.
The simple version of my investment plan was to invest aggressively, which meant 100% stocks, until I hit “my number.” That happened about 4 years ago, at which point I downshifted from an aggressive allocation to a more moderate one. Currently that is a 75/25 stock/bond asset allocation. I don’t invest in real estate (other than owning my house outright) and I don’t include the value of my pension or the equity in my house in my overall asset allocation.
At its most basic, this means that what I’m doing during the COVID-19 pandemic is sticking to my desired asset allocation of 75/25 stocks/bonds.
Rebalancing When My Asset Allocation is Off By > 5%
With all of this market volatility, similar to what happened in 2008-9, I see stock market declines as an opportunity to purchase more stocks when they are on sale. The market will eventually recover. It always has. And if it doesn’t, we have bigger problems and my portfolio probably won’t be the biggest thing I’m worried about.
When do I buy? I’m not a market timer. I just follow my plan, which says that I rebalance whenever my current asset allocation has deviated from my desired asset allocation by more than 5%. For example, a few days ago the declines in the stock market had moved me from 75/25 stock/bond to 68/32 stock/bond. I was > 5% off, so it was time to rebalance INTO the decline. This 5 minute video from Vanguard talks about rebalancing into a stock market decline, if you are interested in watching it. Was my timing perfect? Probably not, but that probably doesn’t matter very much in the long run.
How did I buy? I exchanged 7% of my bonds for 7% of stocks on the TSP and Vanguard websites. I did this all within my TSP and Vanguard IRAs so that none of the transactions would have any tax costs associated with them. You should always try to rebalance within retirement accounts unless you have taxable losses you can harvest. That said, I don’t tax loss harvest because now that I’ve hit my retirement number I just don’t care that much. I choose life over tax loss harvesting.
That’s It!
It is as simple as that. I stick to my plan and rebalance when I’m off by 5%. That’s what you should do. Stick to your plan.
If you don’t have a plan, you better get one. Here’s my stuff that might help or go to the White Coat Investor. He also offers a course to help you do it and recommended advisors if you want help. He also re-posted this article entitled, “How To Survive the Coming Bear Market.” Read it if you think my advice to rebalance into the decline is crazy.
Military Times – GI Bill Benefits to Continue Despite College Coronavirus Closings After Emergency Fix Rushes Through Congress
Here’s a link to this article for anyone worried about their GI Bill benefits:
DOD Implements Policy Change for Child Care Priorities
March 9, 2020
On June 1, 2020, the Department of Defense will implement a policy change to the current priorities for child care. As directed by Defense Secretary Dr. Mark T. Esper in a memo signed Feb. 21, 2020, the department will afford priority access to military families. Beginning June 1, the military services may begin to officially notify families who face being supplanted. Once a family is notified, they will then have 45 days to find alternative care.
”The department’s system of child care was established to assist service members as they face the unique challenges associated with the demands of military service,” said Virginia (Vee) Penrod, acting assistant secretary of defense for manpower and reserve affairs. ”Over time, child care access expanded to serve the total force, but we must not lose sight of the service member and mission requirements. We must ensure that our military members and families have the support needed in order to be mission ready.”
Changes to the policy include clarifying situations where military families may supplant lower priority patrons when necessary. The age of the child and the waitlist at their respective center will determine if currently enrolled families will be impacted. These changes also clarify the definition of a working spouse, provide for ample notification in cases of discontinuation of child care, and provide authority to establish exceptions where mission requirements necessitate flexibility.
”We acknowledge this policy change presents a challenge for some families. The department is committed to ensuring our military members have the care they need to be mission ready,” said Kim Joiner, acting deputy secretary of defense for military community and family policy. ”Child care is an important component to a lethal and deployable force. Expanding access to quality child care remains a top priority for the department and the military services.”
The department’s request for care system, MilitaryChildCare.com, will continue to serve as the access point for all requests for care. Individual priority is verified at the time of enrollment and annually thereafter.
The Military Departments are developing operational guidance and will inform patrons when more information is available.
MilitaryChildCare.com is a secure DoD website providing a single gateway for families to find comprehensive information on military-operated or military-approved child care programs worldwide. With MilitaryChildCare.com, military families create an account and maintain a household profile they can access at any time from any location. By streamlining the child care search and request process, MilitaryChildCare.com makes it easier for military families to understand and assess their child care options and make more informed decisions about their child’s care.
SG Message – Standing Strong When Our Nation Most Needs Us
Esteemed Navy Medicine Shipmates,
Since December 2019, when the Coronavirus Disease 2019 (COVID-19) pandemic
was first reported, Navy Medicine has been on the forefront actively engaged
in and supporting government and international efforts to help protect
Sailors, Marines, Department of Navy civilians, and our fellow citizens from
COVID-19. This pandemic demands the leadership, creativity and commitment
of our entire One Navy Medicine enterprise.
In addressing this pandemic, the Secretary of Defense has clearly
articulated his priorities: (1) Protecting our people; (2) Maintaining
mission readiness; and (3) Supporting the whole-of-government effort. To
this end, we must be ready to execute whatever mission is directed to us.
We have received an order from the Chairman of the Joint Chief of Staff to
prepare our hospital ships – USNS Mercy (T-AH-19) and USNS Comfort (T-AH-20)
to deploy in order to supplement civilian healthcare systems. We will
provide non-COVID care so that they can focus their efforts on those
afflicted by the virus. The critical core staff reported aboard yesterday to
begin the necessary work to bring the ship’s hospitals to life and to
receive the remainder of the crew. MERCY will depart San Diego next week and
COMFORT will follow the following week. I will keep you updated, but this
represents an unprecedented opportunity to project medical power
domestically and to help our country during a national emergency . This is
not our typical mission of providing combat casualty care; however, it
demonstrates our agility and responsiveness to do what the country asks –
wherever and whenever we’re needed. We will keep you updated as this
evolves.
In conjunction with the Department of Defense and interagency partners, our
public health professionals, scientists, researchers, emergency preparedness
experts, and many others are working together to confront COVID-19. Our
Navy Medicine team is actively monitoring the disease and providing direct
support to ensure Navy and Marine Corps commanders have the latest
information to ensure mission readiness and effectiveness. In addition, our
physicians, nurses, corpsmen, clinical scientists, and laboratory
professionals are prepared to identify, diagnose and care for those who may
contract the virus. You’ve heard me talk about my commitment to ensure Navy
Medicine is a High Reliability Organization that uses high velocity learning
and rapid cycle feedback. We are seeing full application of these
principles throughout Navy Medicine and it is making us even more effective
and resilient as we continue to meet this challenge head on.
Below are a few highlights of the actions and contributions Navy Medicine
has made to confront COVID-19:
- Initiated the BUMED Surgeon General’s COVID-19 Watch. This Crisis
Action Team is manned 24/7 and can be reached at (703) 681-1087 or 1125. - BUMED is coordinating directly with Fleet Surgeons and the Medical
Officer of the Marine Corps to disseminate information and actively support
the operational commanders. - BUMED established an on-line communication pipeline to allow
commanders and their supporting fleet surgeons to input questions directly
to our Public Health, Research, and Emergency Management professionals. - Navy Medical Research Center (NMRC) and Naval Health Research
Center (NHRC) are actively involved in the fight against COVID-19 as the
Navy representatives among the 14 DoD laboratories prepared to conduct
COVID-19 diagnostic testing. - Active engagement and collaboration between our Navy Expeditionary
Preventive Medical Units (NEPMUs) and operational commanders continues in
order to proactively respond to needs of Fleet regarding advisement on port
visits to different countries. - A Forward Deployable Preventive Medicine Unit (FDPMU), consisting
of four highly trained specialists, is available to deploy with 48 hours
lead time to provide decision-makers with information on outbreak response
and to assist afloat surgeons in Public Health Emergency Response Afloat. - Developed a Health Protection Condition (HPCON) determination
matrix to aid commander’s decision making to ensure the continued health and
safety of our force, civilians and families. - Created an algorithm for determining status of individuals related
to COVID-19 outbreak. - BUMED has validated our stockpile of personal protective equipment
(PPE) to ensure continued operations should the virus penetrate the force. - We have shipped PPE to our OCONUS MTFs to ensure they have what
they need to respond to this crisis. - Developed interim guidance for cleaning and disinfection of public
facilities for COVID-19 - Developed flowchart to individuals who are ill and think they may
have COVID-19 - Developed guidance for housing suspected COVID-19 patients
- Supporting fleet operations with Pandemic Influenza and Infectious
Disease plans - Navy Medicine is advising and coordinating on a Concept of Operations for medical screening at Air Mobility Command terminals
You are delivering NAVAL MEDICAL POWER to our Sailors, Marines and their
families in person, over the phone and via the internet. The force health
protection of our warfighters is paramount and directly enables naval
operations. I want to emphasize that we must provide clear and objective
guidance to those we care for. As subject matter experts, they are relying
on us.
In order for us to continue to project medical power and protect our
shipmates, we, too, must to healthy and ready. Please ensure you are
protecting yourself and your families so you can continue to provide
outstanding care to those who need us. All commands in the Navy are being
encouraged to help limit Sailor, Marine and family member exposure to the
virus. This includes using flexible work hours, alternating work schedules,
and telework. We need the Navy Medicine workforce to remain strong during
these challenging times. Our Sailors and Marines depend on us.
In closing, please keep an eye on your fellow Navy Medicine teammates and
continue to follow health guidelines, which includes washing your hands more
often, avoiding public gatherings, and staying away from others if you’re
sick. Crushing COVID-19 will be a marathon and not a sprint. The hallmark
of a high reliability organization is not perfection, but resilience. We
will get through this together and we will be a stronger organization as a
result.
Thank you for all the superb work you are doing during this national
emergency, you are STANDING STRONG, not only for our military beneficiaries,
but the country as a whole and you make me incredibly proud to be a part of
the Navy Medicine team.
BZ
V/r, SG
Bruce L. Gillingham, MD, CPE, AOA
RADM, MC, USN
Surgeon General, U.S. Navy
Chief, Bureau of Medicine and Surgery
Finance Friday Articles
Here are my favorites this week:
5 Ways To Make Lemonade Out Of A Lemon Market
Lock In Good CD Rates Before They Disappear
Here are the rest of the articles:
3 mistakes to avoid during a market downturn
Coronavirus Sell-Off Presents Tax-Loss Harvesting Opportunity
Different Ways to Make Five Million Dollars in Real Estate
Grab the Wheel to Deal With Market Volatility
Happiness Economics: What Actually Makes us Happy?
Harder Than It Looks – 3 Alternative Ways to Deal with the Stock Market Decline
How Real Estate Gets Impacted By A Decline In Stock Prices
How to Turn Your Financial Life Around
Lessons From Japan’s Lost Decade(s)
Perspective in a challenging time
Returns From the Bottom of Bear Markets
The Work From Home Survival Guide: Because Your Sanity Is Important
What’s Causing All the Panic Buying & Selling of Stocks?
What’s Different For Dual Income Couples?
Promotion Boards Postponed, PFA Cancelled, and Hair Standards Relaxed
Here are all the NAVADMINs that deal with these issues:
- Postponement of Selection Board Schedule
- Physical Readiness Policy Update
- Temporary Relaxation of Hair Grooming Standards
No, you cannot grow a beard. Sorry.
Throwback Thursday Classic Post – Shortly Thereafter, Things Started to Explode
If you’re interested in reading my guest post on the Miked Up Blog about four of the best and worst moments of my life, you can check it out here:
DoD Travel Restriction FAQs – 18 MAR Update
Here is the updated version that just came out:
Medical Corps Symposium at NMC Portsmouth on 3 APR 2020 is Cancelled
Due to the COVID-19 outbreak, the Medical Corps Symposium that was to be held on 3 APR 2020 at NMC Portsmouth will be cancelled. Our preliminary plan would be to hold one at some point in 2021.
Simple Steps I Take to Protect My Credit and Identity
My personal information has been stolen at least twice. As a result, I think it is important for everyone to consider taking basic steps to protect their information. Here are the simple steps that I recommend you use to try and protect your identity and credit:
- Open all mail. If someone opened a fraudulent account in your name, you might start to get mail that makes absolutely no sense to you. Don’t just chuck stuff that looks like junk mail.
- Use two factor authentication for all financial account logins. This is now required by the TSP, and it is for good reason.
- Use a password manager. I use Dashlane, although there are others. This ensures that your passwords are cryptic but that you don’t have to remember them.
- Consider establishing active duty credit alerts on all of your credit reports with all of the credit agencies.
- Check your credit report every four months, checking one from each of the three credit agencies. Some people check all of them at the same time once a year, but I think that by staggering them and doing one every four months it is more likely you’ll pick up something fishy sooner rather than later. Check for mistakes and accounts you don’t recognize. Both could be a sign of identity theft. Just go to AnnualCreditReports.com to get your free credit reports.
- Set up alerts so that you get notified whenever a transaction occurs without a credit card being present. Contact your credit card companies to get this set up. You can usually set dollar thresholds above which you want to be notified, or you can get notified about all transactions. When our credit cards have been hacked it has often been for modest amounts and things like gas purchases, so worrying only about high dollar purchases is probably not the way to go.
- Based on the Equifax hack and others, we have reported to the IRS that we are potential victims of identity theft. This means that we cannot file our taxes without a special pin that is mailed to us each year. This prevents others from fraudulently filing taxes in our name and stealing a fraudulent tax refund. Consider doing the same if this is applicable to you.
There are other steps you could consider taking that I have not personally adopted. For example, instead of an active duty alert you could place a freeze on your credit accounts. This prevents anyone (including you) from getting a credit card or loan in your name. It will also prevent you from doing things that require a credit check, like switching cell phone carriers or renting a house/apartment. Since I am still in the Navy, I decided to go with the active duty alert instead of the freeze due to the lower amount of hassle when we have to PCS in the future. Here’s a good post that explains the difference between the two options.
Websites like CreditKarma offer free, real-time credit monitoring. In the past I used their services, but don’t anymore. I honestly don’t remember why I turned it off, but I may consider signing up again now that I think of it.
Cyber incidents and identity theft are just par for the course nowadays and the price you pay for on-line convenience. Make sure you set up your own plan to limit the chances you’ll be personally affected by identity theft or cyber crime.
Joel Schofer's Career Planning Blog 