It’s hard to believe that it’s been over three months now since we had that week that saw the announcement by the World Health Organization that classified COVID-19 as a pandemic and the entire nation shut down.
As often happens when uncertainty hits, the stock market took a huge dive in march. While it seemed scary at the time, I wrote an article that covered why I wasn’t concerned about being invested in the stock market even though it had tanked.
I don’t often check how my investments are doing in the stock market. Since I believe in investing in index funds that track the broad market, and since it’s going to be around 30 years before I actually need the money, I just don’t really check it much. If it goes down, I know it’ll come back up.
But COVID-19 has been anything but ordinary. People always talk about our new normal. This is not normal at all.
So with this situation being such a big event for all of us, I thought it’d be worth it to take a look at how the stock market is doing and to see where we might go from here.
In fact, when I first was putting this article together last week, it was before the recent spike in cases that we’ve experienced. It’s especially bad in Texas and in Houston, where I live.
So, How’s the Stock Market Doing?
Let’s take a look at the Vanguard Total Stock Market Index Fund. This is a fund that I actually recommend for investing. This index fund tracks a whole lot of individual stocks in the stock market. It’s not like just being invested in Apple or GE. It’s invested in a ton of different stocks. That means that if something were to happen to one company, it would be ok because you’ve have so many other companies to dilute it out.
Generally, this fund behaves the same way as the market.
If you want to look this fund up, all you have to do is google its sign-VTSAX.
Here’s what I’m looking at.
If you were to look for when this index fund was doing it’s best, you’d see that it was almost worth $84 per share around February 19th. Then, at its lowest point so far during the pandemic, it went all the way down to $54.49 on march 23rd.
That’s definitely a huge dip, and if you’ve got your life savings in there, it’s understandable that you’d be freaking out.
But, soon enough the market rebounded like it always does. On Thursday, June 18th, it ended at $76.88. On Wednesday, June 24th, after the news that COVID is getting worse, it was $74.87. So it’s down a few dollars from when I was first writing this article. Not totally all the way back to where it was, but it’s getting closer.
To continue to put this in perspective, I’ll also want to point out that on June 19th of 2019, VTSAX was worth $72.64.
The stock market is actually doing a little bit better than it was a year ago.
But that’s the way it works. Over the long term, the market always gains ground.
Rough Seas Ahead
Look, I don’t want to give the wrong impression.
I think that we still have rough seas ahead. Especially with the news that COVID is continuing to get worse.
I’m not sure what effect this may have on the economy. No one can know, not even professionals. People can give educated guesses, but there’s a reason why trying to time the market doesn’t work.
Because we never really know what it’s going to do.
Remember Circuit City? The electronics store that went out of business after the housing crash in 2008? They weren’t the only ones. There were many businesses that we had grown used to that vanished during that time.
COVID-19 has already claimed a few businesses and I can only assume that there will be more.
But businesses fail and people regroup. Lives, however are irreplaceable.
The Silver Lining
Here’s what I do know: Even though there’s potential for rough times still ahead, investing for the long term has proven itself over and over again as a good plan for long term savings.
Human’s are innovative and creative. No matter what happens, people will continue to show amazing creativity and find solutions to the problems that we face.
Businesses will continue to innovate and morph to adapt to the circumstances. So even if one business fails because they didn’t pivot, there will be three more that rise up to take their place.
So if you’ve been investing, know that the market will continue to be volatile like it always has, yet it’s still proven over and over again to grow over the long term.
Jared
Disclaimer: All investing is subject to risk. I am not a financial professional. The ideas contained in this blog are strictly for educational purposes. You assume full responsibility for any actions you take.
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