More Money Podcast - My Thoughts on the Stock Market & Pandemic - Money Minute with Jessica Moorhouse

Episode Date: March 20, 2020

We are still dealing with a volatile stock market and health crisis, and everyone, understandably, is feeling anxious and panicked. Even though we’re in an uncertain time, here are some of my tips for what to do based on some of the messages I’ve been getting recently. First off, if you’re currently investing and feel like your job is fairly stable, then don’t do anything differently than what you’re currently doing. Continue to make your regular contributions to your investments to practice dollar-cost averaging and ride out this wave because the stock market will recover. And if you have some extra money laying around and feel comfortable doing so, you can even increase your investment contributions. If you want to try your hand at investing in individual stocks or ETFs, this is a good time to buy, however, it is still risky and you need to understand what you’re doing and the risk you’re taking on. The stock market will most likely continue to plummet, so as long as you plan on buying and holding for the long-term, you will eventually see positive returns in the future. Just make sure you’re only dedicating a small percentage of your portfolio to this type of investing. Secondly, if you don’t feel safe at your job and there is the risk of being laid off or having your hours cut, this is the time to focus on your emergency fund. Cut back on other expenses so you can dedicate more funds to your emergency fund, and if necessary either pause or reduce your investment contributions if you don’t think you have enough cash saved up in the event that you lose your job. Thirdly, if you want to take this time in self-isolation to increase your financial literacy, then read books and blogs, listen to other podcasts, and if you are interested, sign up to my Investing Foundations for Canadians online course. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to another episode of Money Minute with Jessica Morehouse for this Money Minute. Well, I mean, we're still dealing with the pandemic, so we've got that. So all I want to kind of share is just a few, I think, pieces of advice that I have been sharing, I feel like, for the past several weeks, but it's always good just to hear them again. So number one, if you are currently investing and you feel like you are pretty stable in terms of your emergency fund and your work, you're not really concerned on those friends that I would say, don't do anything differently than what you're currently doing. If you have those auto contributions, keep going. If you have some extra cash on hand, I mean, not many of us do, but if

you do, then go ahead and maybe increase your contributions. Or if you've always wanted to buy some individual ETFs or stocks, make sure that's a very small percentage of your portfolio. I would say like maybe leave it at 5% and then go ahead, buy some stocks or ETFs. They're on sale right now, but just understand the risks of doing so, because obviously it is more risky just buying individual stocks, ETFs, not so much. They are diversified. But just know what you're doing. Now, if you aren't really sure about your job, it could go either way.

And you aren't really sure about your emergency fund. You're not quite sure if you have enough enough because we've never experienced anything like this. And there's a lot of things up in the air. So what I would suggest is you can do a couple of different things. Like number one, your emergency fund should be your main priority. So if you are still working and earning money,

make sure to cut costs in your budget. This is time to kind of maybe live a bit leaner, kind of practice that frugality, that minimalism stuff and cut back. So you have that extra cash to put towards your emergency fund. Because again, you may, you may be dipping into it right now. So you can stockpile some, you know, food and some other provisions for your home. So definitely do that. And, you know, and when it comes to cutting, make sure obviously you're cutting things that you can live without. You can press pause on those subscriptions and anything that

is more of a want than a need. Now, if you're feeling kind of like, should I continue to invest even though I don't have maybe enough in my emergency fund? Well, my kind of way of thinking, I feel like I probably said this on the show too, is I feel like there's a kind of a priority sequence in terms of what you should get done with your finances. Number one, have a fully funded emergency fund first. Number two, then make a kind of a debt repayment plan where you can put more than just the minimum payments on your debt so you can aggressively pay off your debt. Number three, invest.

So if you feel like you're investing right now and you don't have a fully funded emergency fund, then of course you are faced with the decision what to do. Does it make sense to stop investing until things are a little bit more stable or decrease your auto contribution so you have more cash to put into your emergency fund? I'm just kind of reiterating the emergency fund should be first and foremost. I also want to say that if you're like, oh, this is a great time to buy stocks. Yes, it is. But don't dip into your emergency fund to buy investments. The emergency fund should not be touched unless there's an emergency. You do not want to be in a situation where you have to sell off those investments at a loss

because things are continuing to dip because now you need to dip into your emergency fund because an emergency is happening. So don't, once you have an emergency fund, don't touch it until you actually need to. And lastly, because this is kind of the thing that everyone is talking about, self-isolation, self-quarantining, this is kind of the way that we are all going to get out of this unscathed or not get COVID-19 is to stay at home. And luckily, when you do stay home, you can save a lot of money because you're not really spending money going out. So that is one kind of benefit. But I would say use this time that you have at home wisely. This is a great opportunity to organize your home, feel more in control of your home. That's what I've done. I've

done a whole inventory of my house and it honestly did make me feel more centered and in control and calm. So I'd highly recommend doing that. Clean your house if you haven't in a while. It'll also make you feel really good. Rearrange your home so it's more pleasing and calming to you. And then also what a great opportunity and great time to start learning more about personal finance. Pick up that book that you have on your bookshelf and you've never read or read those blogs that you always wanted to. Listen to some of my back catalog or listen to other podcasts that you've always wanted to listen to. I myself actually just got a subscription. This isn't a promo or anything. I just got a subscription to The Motley Fool because I was watching a lot of their videos.

I'm like, you know what? I want to learn more and really consume their content. So that's one thing that I'm kind of doing with more of now that I've got more time at home. That's kind of one thing that I'm going to do. And of course, if you want to learn more about investing, I have an investing course, Investing Foundations for Canadians. If you want to check it out, go to jessicamorehouse.com slash investing foundations. So if you've always wanted to take an online course about investing, but never had the time, well, you got the time now. Or there's a lot of other great courses out there. Just do whatever you want. I don't care. But use your time wisely. And also, when you do that, when you do kind of

put your time into something like reading or learning or something, you're not going to spend as much time worrying about all the ifs, ands, buts, what could happen. Because we don't know what's going to happen. Letting your imagination go wild is not going to help you. Believe me, I've had lots of bouts of panic the past week when I've been reading Twitter or Reddit or the news way too much. Put your time and your energy to better use. It's always good to stay in the loop of everything, but you don't need to be on Twitter 24-7. That's going to make you go crazy. So that is what I have to say for this money minute. I hope everyone is okay. Stay safe. Definitely,

if you can stay home, I think this is a really important thing that we all need to be doing. But just know that I am here with you. I'm experiencing this along with you. You're not alone. I'm here. Pop into the Facebook group, jessicamorehouse.com slash Facebook group. I'm experiencing this along with you. You're not alone. I'm here. Pop into the Facebook group, jessicamorehouse.com slash Facebook group. I think so. Or facebook.com slash group slash money life balance. Come and chat with us and don't feel alone. We're all going through this together. Anyways, I will be back here next Wednesday with another interview for the Momente podcast. Thanks for listening. Have a good, safe and calm weekend. This podcast is distributed by the Women in Media Podcast Network.

Find out more at women in media.network.