Today, Josh & Austin are heeding federal and state recommendations and working from home (so please forgive any audio flaws). In this episode, they will provide an update on the ongoing coronavirus outbreak both in the US and abroad as well as discuss the government’s upcoming fiscal stimulus package, markets, and some practical guidelines. At least for the next couple episodes, the coronavirus will be the topic of discussion for The Invested Dads!
Links & Resources
Coronavirus Stats (Worldometer)
Interactive Map & Stats (John Hopkin’s)
Mapping the Coronavirus Outbreak Across the World (Bloomberg)
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Main Talking Points
[1:13] – Latest Developments Around Coronavirus
[3:54] – Recent Developments here in Ohio
[9:12] – Other Developments Around the World & in the U.S.
[11:12] – Fiscal Stimulus Package from the U.S. Government
[15:06] – (Virtual) Dad Joke of the Week!
[15:41] – What Can We Ohioans Do for the Greater Good?
[21:30] – How Should You Feel About Your Money Right Now?
Social Media
Full Transcript
Intro:
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey, hey, hey, welcome back to The Invested Dads Podcast. Today, Josh and I are bringing you a special episode about the coronavirus from quarantine. Actually, we’re not really in quarantine, like we’re not ill, but we are taking the recommended procedures from both the federal government and our state governments to work from home if possible. So, I’m sitting at my office, Josh is sitting in his bedroom and we’re recording to you. We are ready to go. We’re ready to roll. So, yeah, a lot has been happening over the last week, and we thought we would do our best to keep you up to date with the progression of coronavirus and talk about really what’s going on, because this is a very busy time of the financial markets, our careers, this podcast, and we are trying to keep you as well informed as possible. So Josh, what is the latest? How are cases coming? What’s going on?
[1:13] – Latest Developments Around Coronavirus
Josh Robb:
So right now, what we’re looking at globally, there’s been over 200,000, about 205,000 cases confirmed globally. Those are confirmed cases, again. And then we’ve seen 8,270 deaths. So that’s globally. A lot of those were in China early on, but they’ve slowed down, and we’ve seen it move more towards Europe and the Italy area. It amounts to about a 4% death rate currently from tested confirmed cases and the amount of deaths compared to that. Now, there is-
Austin Wilson:
That’s so high. That seems high. Woo.
Josh Robb:
Yep. But also, remember that almost 83,000 have fully recovered, and so that’s a 40% of those that have been tested have fully recovered. Now, the remaining group there are still in the process. Whether they’re severe or not, that’s just the number of cases globally confirmed. Here in the United States, we have about 6,500 cases confirmed and 116 total fatalities. So that’s actually a 1.8% rate based on the confirmed cases. Now, we have a lot fewer confirmed cases. We had some issues with getting test kits available, so they were only testing those that were high risk or severe. So I wouldn’t be surprised if that rate does move up for a little while. Until they start testing more and more people, then you’ll see that rate drop back down.
Austin Wilson:
Yeah. I think that the further we get into this, the more we’re going to have actual numbers. So the denominator is going to go up, which means the fatality rate overall’s definitely going to go down over time. It’s having an impact around the world, and we’re starting… We’re only in the beginning of this in the United States, and it’s going to continue to grow for a while.
Josh Robb:
Yep. You could tell that by the recovery cases too. There’s been about 106 recovered cases in the US, which is about 1%, again, compared to that 40% we’ve seen globally since the beginning. So it was delayed getting here to the US and so we’re a couple of weeks behind everybody else when it comes to the progression.
Austin Wilson:
Yeah, that’s right. I guess breaking news as of this morning… So this is being recorded on Wednesday, the 18th of March, 2020. Breaking news as of this morning is that President Trump has announced that he is temporarily closing the Northern border to Canada, which is interesting because Canada had already closed the border, and that’s… I don’t know how many borders they have. Not too many.
Josh Robb:
They had closed the border, but the US was still… US people were still allowed to move through.
Austin Wilson:
So now that is closed down. So we are doing our best as a country to really prevent the spread even further. So that’s kind of a big deal as that will be a lot more difficult and delayed for people to get across the border either way for a while.
[3:54] – Recent Developments here in Ohio
Josh Robb:
And then here, we’re in Ohio where we are recording, our governor, DeWine, has been one of the leading governors here in the US when it comes to initiating changes or suggestions or issuing decrees to make the best effort to curve this growth rate. So some of the things he did was Tuesday, yesterday, was voting, and so he postponed… Although he did not have the authority to actually cancel or postpone it, he submitted a lawsuit on behalf of people who would be effected and asked that the judicial branch here in Ohio suspend voting or move it to a later date. So that was Monday when he announced that. Monday night, the judge said no, and I went to bed. The next morning, I woke up super early so I could get to the polls before work, because I’m trying to be a good citizen and do my duty and vote, got dressed, ate my breakfast, was heading out the door when my wife turned on the news and said, “Oh look, they canceled voting.” I would’ve showed up-
Austin Wilson:
Things changed.
Josh Robb:
… empty church where my voting is. So it turns out that later that night, they reissued and another judge did decide to push it down the road.
Austin Wilson:
Well, it was actually the… So the… Yeah. They decided it was a health emergency and then have then… that was able to be used-
Josh Robb:
That’s right.
Austin Wilson:
… as the reasoning there. So I think it’s not the voting was canceled. So-
Josh Robb:
You can still go vote early. You could go get your ballot and vote right now.
Austin Wilson:
Or you can mail in your ballot or whatever. All over Twitter or whatever right now, people are going crazy thinking that people have taken… the governor has taken away their right to vote, and no one is doing that, everyone. So let’s stop freaking out. It is a health reason why we’re doing this.
Josh Robb:
They’re going to have their primary later.
Austin Wilson:
Yeah. This is to protect mostly older voters who would go and vote.
Josh Robb:
Not just the voters, who runs those polling stations?
Austin Wilson:
Older people.
Josh Robb:
Yes. Normally, that’s who’s their volunteer.
Austin Wilson:
So the more susceptible people are going to be… would have been impacted by this, and this is really to protect them. So really, I think it’s June 2nd, which is my wife’s birthday, that is going to be the date that the primary will actually be tentatively moved until… And that’s the latest date. I think DeWine said that it can still be pushed before the convention for the Democrats really to still be kind of counted in their figures.
Josh Robb:
If you don’t want to wait, you could go get a paper ballot or an absentee ballot and vote now-
Austin Wilson:
Exactly.
Josh Robb:
… or you could wait till that day and vote in person at the polling station.
Austin Wilson:
I think that one change that’s going to come out of this whole thing is that hopefully we can move to a system where you can vote from your phone.
Josh Robb:
Yeah. There would have to be a lot of…
Austin Wilson:
Yes. But I think we’re headed there eventually for things like this.
Josh Robb:
Coming back to DeWine, he also issued a closure of restaurants and bars, and that was, again, one of the early states to do that. Illinois and New York followed suit with some of those closures afterwards. But it had a lot to do with, this last weekend heading into St. Patty’s Day college students, because they closed the universities decided, hey we have nothing to do, let’s go out, and there was a lot of bars and places crowded over the weekend. So in a sense, governor DeWine said, “Hey, if you can’t self-police, I will help you,” so he closed things down.
Austin Wilson:
I guess to clarify that, that is for sit-in dining only.
Josh Robb:
Yes.
Austin Wilson:
So he has been very, very adamant about keeping take out and drive through and that kind of thing open, because a lot of people depend on that each day or a lot of days or once a week, or however many times you do that, to eat of some sorts. So those factors are still open, but that is what is contributing a lot to some of our… the employment situation, because a lot of people are employed in that industry, and it’s having a pretty big impact on them.
Josh Robb:
Yep. As a result, then he’s followed that up with now closing down the bowling alleys and any place where there’d be large gatherings, he’s closed those down temporarily to, again, avoid large groups of people getting together and possibly spreading this virus. Again, you have the virus and can infect others even before you have symptoms. So it’s not even like people are being irresponsible and they don’t feel good and going out, they could have this virus, spread it to others before they even realize it.
Austin Wilson:
Yeah. Yeah. It is crazy. So that is what’s going on in Ohio specifically. They’ve also discouraged unnecessary travel in general, and there’s actually some banners on the highway that say, “Hey, don’t do any unnecessary travel if you don’t have to.”Just because we’re trying to self-isolate as much as we can to prevent the spread person to person. Even if you don’t know you have it, the best thing you can do is to stay home.
Josh Robb:
Yep.
Austin Wilson:
That’s why we’re home right now.
Josh Robb:
Yes. He mentioned, try to avoid groups of 10 or more, and there was talk of it moving down to five or less. My thought was, well, I have six in my household with the four kids-
Austin Wilson:
Who are you kicking out?
Josh Robb:
… whoever doesn’t get their room cleaned, who’s ever at the bottom of the chore list is… Hey, you better pick up your game. You’re on the chopping block right now.
[9:12] – Other Developments Around the World & in the U.S.
Austin Wilson:
That’s right. So there is a number of things that I’ve been watching over the last really 24 hours or so. Some of those things being that we got news that Chinese auto sales were down in February, 80%, the worst month on record, and that was obviously due to the coronavirus impact there. My anticipation is that we will see something similar as this shutdown-ish economy takes place here in the states. So that is not a great thing for our auto sector, not a great thing for the employees for that, because the UAW, the union, has been pushing for some plant shutdowns and stuff like that just because there’s so many people in those plants and they can easily spread things back and forth. So that is something that we’re watching for sure.
Also, over the last day or really week, due to the Federal Reserves actions to really instill some extra liquidity in the market, they’ve been buying up assets, and that’s pushed yields back up. So cash in the market pushes prices down, which pushes yields up, and that is a good thing. But the fact that we had to do that really wasn’t that great, because demand… tough. Also, in the last 24 hours, Joe Biden won Illinois, Michigan and Florida primaries. Now, Ohio did not have theirs. Michigan, Illinois and Florida did continue to have them yesterday. In my opinion, I would have done what we did here in Ohio and pushed that, because I think that’s a lot of people in one place, could have exposed a lot of people and we could have pushed that back if we would have slowed it down. But that did happen yesterday, and Joe Biden won those all, pretty much sealing up the Democratic nomination against Bernie Sanders. So that really happened.
As of electionbettingodds.com, or .org, I don’t remember which one it, we’ll link it in the show notes, it’s pretty much a dead heat between Joe Biden and president Trump in the fall, looking at November. So that’s a pretty big deal there.
[11:12] – Fiscal Stimulus Package from the U.S. Government
Austin Wilson:
What else is going on here? Crude oil is under $30 a barrel, and with no anticipation that that is going to increase anytime soon. There really isn’t going to be any reason for a spike in demand for the foreseeable future. So wow, that is just unbelievably low oil prices. So yeah, that’s where we’re at. I guess that leads into the discussion of yesterday’s market rally. So yesterday was Tuesday the 17th. We saw 1,200 points, 1,300 points on the Dow, a good rally. But what that was anticipation of is a fiscal stimulus package from the government. What that looks like is President Trump wanting about 1.2 trillion, with a T, trillion dollars of stimulus into the economy coming from a couple of different things. Number one, direct payments of $1,000 or more to families within two weeks. That is coming up quick, but we still don’t have, for sure, details on that.
Another thing is, if this thing continues on, so through the end of April, another $250 billion of money distributed. If it continues into the end of May, another $500 billion distributed. What secretary of the treasury, Minutian, says is that if we do not get this fiscal stimulus package, we could see unemployment of about 20%, about twice what we saw during the recession we had in the financial crisis. So that is big, and that is what… The lack of details, I guess, and the lack of faith that it’s really going to do. What it needs to do to stimulate the economy is what’s driving markets down today, giving up most of yesterday’s gains. This week, we’re seeing overall 12% losses in the markets over for the S&P 500, and that is a pretty big number for one week. We’re down about 29 to 30% from all-time highs, and that is a definitely moving markets.
Josh Robb:
Yeah. That stimulus package, the idea there is, well, when restaurants are closed, when those bars are closed, when all those bowling alleys, everything is closed, employees aren’t earning anything. So their home, no income, but then the owners of the businesses have no income, and their uncertainty of, who do I hire, who do I bring back, when do I bring them back? If I bring workers back to work, but no one shows up, I have to pay them. So there is this whole concept of… Like you talked about this, unemployment is not only temporary while everything’s closed, but when they reopen, will every business rehire everybody that was there if they’re worried about the demand?
Austin Wilson:
Right. I guess another thing that is a big part of this puzzle is taxes. Something that’s being discussed is for any of the small businesses that has like under a million dollars of taxable income, you can postpone your tax payment 90 days, which is a pretty big deal. That puts you out into July. Also, the IRS is loosening up tax day for normal everyday W-2 people as well so that hopefully they can just kind of get by and not have to pay those checks or whatever right away, and hopefully keep a little bit more money in people’s pockets for a while.
Josh Robb:
Yeah. So if people are filing their taxes and haven’t yet, there is some flexibility. They say still do file your taxes, but if you owe, you can wait to pay. There’s no penalty, no interest for that waiting. But you still need though file though.
Austin Wilson:
Yes, exactly. Don’t not file your taxes. One thing they talked about… I think President Trump talked about yesterday was that specifically speaking, if you’re going to file your taxes online through like TurboTax or whatever, anyway, it’s going to be fine, it helps them out, helps you out. But I guess this is probably aimed more at the people who have very complicated tax returns. You have a little bit more flexibility there.
Josh Robb:
The big idea there is filing your taxes, but when it comes to the payment, if you’re worried about cash flow, you have some flexibility there.
[15:06] – Your (Virtual) Dad Joke of the Week!!
Austin Wilson:
Exactly. All right, Josh, I want to make you laugh because A, I’m not sitting across from the table from you, so I’m going to see how this works over the internet. But also, this has really kind of been a depressing time in the markets, and it’s… It’s hard to find a lot of good news and a lot of light in this, so let’s lighten it up a little bit.
Josh Robb:
Okay.
Austin Wilson:
You ready?
Josh Robb:
Yes, I am.
Austin Wilson:
Dad joke of the week, virtual, online: Why did the graduate thank sidewalks in his graduation speech?
Josh Robb:
I’m not sure why.
Austin Wilson:
For keeping him off the streets.
Josh Robb:
Oh, nice. Nice.
Austin Wilson:
So, that joke of the week-
Josh Robb:
I like it.
Austin Wilson:
… brought to you virtually.
Josh Robb:
Love it.
[15:41] – What Can We Ohioans Do for the Greater Good?
Austin Wilson:
It’s great. So Josh, what are some things that maybe we’re doing here, especially in Ohio that we’ve gotten some guidance for or some things that people can do to help out the greater good here?
Josh Robb:
So there’s the high level guidelines that we were talking about. The federal government and then some of the states have come out with some suggestions. So the first one is if you can quarantine or stay home, avoid contact as much as possible. So they said 15 days, that was a couple of days ago, 15 days working from home. So that’s one thing. If you’re capable, just to avoid that extra contact, work from home. The second one is, and we saw this with toilet paper, is don’t hoard, don’t overbuy to stockpile more than you really need. There’s a lot of people out there with a lot of needs, and you don’t need a bunker full of toilet paper right now. I’m pretty sure all of the symptoms for the coronavirus, even if you get it, toilet paper does not really help with most of those. So just do your best, keep what you need, but don’t overextend what you’re buying, because there’s a lot of people with needs out there.
Austin Wilson:
Right. And the stores that carry that stuff are going to remain open, so don’t… Hopefully, once we go past this people-freak-out phase where people bought truckloads of toilet paper, we’re going to have normal demand, normal supply, people are going to be able to go to the store and buy the things they need.
Josh Robb:
Yup. So my wife went to the store yesterday just to pick up a couple of small things, and while she was waiting in line, the people behind her were having an argument whether or not it was even legal for storage to limit the purchases. I’m thinking, they shouldn’t have to, to begin with. But if they have a sign that says, limit three packs of toilet paper per person, that’s to help everybody. My thought went, well, they do that every black Friday. You can’t go in and buy 15 of the Super Friday TV sales. They do it all the time. But the fact that these people were arguing makes me… They’re not understanding the concept is, you don’t need 12 months worth of toilet paper stocked up, because we’ve seen even in Europe, Italy, the stores are still open and they’ve been in quarantine since late February. Their stores are still stocked, there’s still stuff there. If everybody just calms down and buys what they need… You could buy two weeks worth of toilet paper, that’s great, because you’re going to be there for 15 days, that’s fine.
Austin Wilson:
Exactly.
Josh Robb:
I have six people in my household, so I do need a couple packages of toilet paper just to get through that timeframe. I’m not hoarding it, I just know that when I have four kids, they tend to use toilet paper and so I need some. And then when it comes to groups of people, avoid large groups. If you can do it remotely, if you can do it online, great. We saw a lot of churches step up, and although it wasn’t mandated, they canceled services with the concept being if we can help instead of hurt the situation, that’s for the better of the whole community. So they did-
Austin Wilson:
And that number-
Josh Robb:
… online services.
Austin Wilson:
Yeah. And that number is going down. It was a hundred, then it was 50, then it was 20 then it was 10, and now I’m hearing even five is where we’re headed. So-
Josh Robb:
Again, one of my kids is in trouble, so-
Austin Wilson:
I know.
Josh Robb:
…see what’s going on at home.
Austin Wilson:
If you stay home, you should be fine and you’re not infecting other people, you’re just doing your own thing. It’s just avoiding groups if you can. That’s not saying don’t go to the store and buy the things you need, don’t not go to the store and get your medicine or your milk or whatever, that’s fine. Be careful and wash your cart and hands and yada yada yada, but just don’t go to like… Obviously, restaurants in Ohio anyway are closed, but this is just a reason to not go do those things.
Josh Robb:
And then personally, just hygiene is key.
Austin Wilson:
Oh yeah.
Josh Robb:
Stay clean, avoid touching your face, your mouth, your eyes, your nose. Because this virus is very contagious, but it needs a way of getting into your system. So that’s why staying six feet apart from someone if you’re talking to them or interacting is best, because even just the normal conversation, you could have spit or whatever coming out of their mouth, and you don’t want it getting into your body.
Austin Wilson:
Right.
Josh Robb:
So avoid that close contact, wash your hands, stay clean.
Austin Wilson:
And then also, a big thing, if you feel even a little unwell, just stay home.
Josh Robb:
Even if you said, there’s no chance I have the virus, stay home.
Austin Wilson:
Yes, exactly.
Josh Robb:
Be safe. Better safe than sorry. And in the next one is, we’re in this together, help each other out. There are probably people in your community that have needs. If you’re aware of them and have the ability, help out. I’ve seen a lot online, Facebook and those places where people are offering, Hey, if there’s something going on with… Especially with kids staying home now, there’s a lot of kids that their food consumption during the school year is that lunch at school. Otherwise, they’re not getting fed. People are just offering, Hey, if there’s anything we can do to help, let us know. Schools are offering to continue that program. They were able to get that passed by the states, where they were able to say, okay, we can continue this food subsidy program, come pick it up and you can have food. So there’s opportunity out there, but help out. Be willing to sacrifice a little bit of yourself for those that are more likely to be affected.
Austin Wilson:
Exactly.
Josh Robb:
Is it convenient for Austin and I to be home working from home? No, it’s very inconvenient. But if it’s a little sacrifice that we could make just for the chance that I could cause the disease to spread a little more, I’m willing to do that.
Austin Wilson:
Yep.
Josh Robb:
Is it convenient for us to have to cancel plans? No, it’s not. But we’re willing to do that, because if we could save one person’s life who is a higher risk at getting this virus, then I’m willing to do that-
Austin Wilson:
Every day.
Josh Robb:
… and hopefully, a lot of people are.
[21:30] – How Should You Feel About Your Money Right Now?
Austin Wilson:
Yep. Let’s do that together. So, Josh, I guess the big takeaway is, how should people feel about their finances, their investments, their… What should they do on that aspect of things? Because A, the market is really uncertain, and B, things could be tough for people personally, with some shutdowns and stuff going on right now.
Josh Robb:
Yeah. So a couple of things. First is, hopefully you have a financial advisor. That’s what they’re here for. Financial advisors are here to help you out. He or she should have a plan in place for you on what your long-term goals are, how this is affecting it. They should be evaluating that. But from a shorter standpoint, hopefully you’re in a risk situation where you’re not overexposed with this volatility, which is a lot, but it’s still within norm. We’ve been down 30% before, we’ve seen these experiences. This is a little quicker than we normally see, but it’s well within the long-term what we’ve experienced. So hopefully, you’re in a spot where you’re comfortable to ride this out and not make any drastic decisions.
Austin Wilson:
Exactly.
Josh Robb:
And then the second one is just from a needs based, especially if you’re in those industries that are or can be affected, make sure you have some emergency cash. We talk about that emergency fund, that’s what it’s there for. When there’s a disruption to your normal life, you have some cash available where you’re not having to sell something when it’s down. You have some cash available to say, okay, I can pay for those things that are being disrupted and I don’t have to touch my long-term investments. So-
Austin Wilson:
Exactly.
Josh Robb:
… make sure… It’s hard to talk about now. You should have been building an emergency fund a couple months ago, but the idea is if you have that cash, that’s what it’s for, don’t hesitate to use it. There’s a lot of people that build an emergency fund and then are just too stubborn to ever use it, and that’s what it’s there for. If there is an emergency-
Austin Wilson:
Exactly.
Josh Robb:
… use your emergency fund. But when you get the chance, refill that back up, so if there’s more that comes down the road, you are capable of withstanding it.
Austin Wilson:
Yeah, absolutely. I totally agree. So as always, especially in these uncertain times, don’t hesitate to check out our free gift to you, our brief list of Eight Principles Of Timeless Investing, eight principles that will keep you on track when things are choppy, when things are down, like right now. So check that out on our website, it’s free. We’d love to continue to provide these podcasts for you each and every week, and we’re going to aim to do that even in this crazy time where we’re working remotely or whatever. But if you could help us, support us by subscribing, leaving us a review on Apple Podcast, that’d be awesome. Also, don’t hesitate to email us if you have any ideas of questions to hello at theinvesteddads.com. We’d love that you share this episode with friends and family. That would be awesome.
Josh Robb:
Yep. Well, thank you guys for tuning in. Hopefully, you’re staying safe and healthy, and we will talk to you next week.
Austin Wilson:
Thank you.
Outro:
Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn’t have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review. Click subscribe, and don’t miss the next episode. Josh Robin and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only and should not be relied upon for investment decisions.
Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions, or forecast provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.
