Welcome to the second of my Corona Diaries. Actually, that’s a lie; this is in fact the 3rd. The second is still sitting in the “drafts” folder. I wrote it last week a couple of days after lockdown had been announced and, frankly speaking, it wasn’t good. Perhaps we’ll release it one day, like a deleted scene from a film – it wasn’t good enough to make the final cut.
Why? Because I was a mess last week. I will level with you, I was absolutely terrified about what was going on. Again, not because of the virus – as bloody awful as it sounds if you have it – but because of the impact on our way of life. My personal take on it is that HM Government have done the right thing with the amount of money they’ve thrown at the problem, in terms of trying to keep finances stable, but it is a problem we’re going to be paying for, for a VERY long time. The next budget is going to be an absolute belter with significant rises in taxation as sure a thing as you could care to wish for.
Panic over?
This week I am a little more calm, not much, but a little. I ventured out to the supermarket today to get supplies (first time in about 14 days) for my partner and I, as well as my mum and dad. Seeing the people out and about was quite reassuring; the staff in the supermarket going about their work, talking to the checkout lady in Iceland (cheap Ben and Jerry’s and a couple of packs of Gregg’s Chicken Slices) gave me a little hope that things are not too far away from normal for some people. I am however, worried about those who cannot work at the moment. My hairdresser contacted me to cancel all appointments for the time being. I offered to keep paying her, not as charity…I’m going to need those haircuts one day, but she declined, saying that she had managed to save some money so would prefer to live off of that. I hope she’s managed to sort out something under the self-employment scheme the government offered. The same goes for the guys who do my garden. This is prime earning time for them, and they are being denied it by this virus – there will be millions like them.
Time for some stock market action
The stock market has been up and down all week long and seems to have found a new range. As we have discussed before, TMM was planning on making an investment and this week we took the plunge.
We took the decision to divide a pot of £1650 between the three of us, giving us £550 each. I was first up to bat and decided to invest in a UK-based fund of funds which is about as middle of the road as you can get. It offers a very dull and uninteresting mix of growth and income (2.4% at the time of writing on an accumulation basis, so we won’t be taking the income as cash, rather rolling any income into the fund automatically and hopefully, growing the value of the fund). Chris and Dave are both keeping their powder dry waiting for calmer waters; I’m subscribing firmly to the “time in the market, not timing the market” approach. Let’s hope that wasn’t too foolish of me. We’ll report on the fund(s) in our monthly reports.
Business is on hold
Chris, Dave and I had a call during the last week and made the decision to furlough our business. It has been an unmitigated disaster so far, roughly breaking even but showing no signs of making a profit any time soon. With this in mind, we have taken all our on-going costs such as website and other subscriptions and pared them back the absolute minimum. We haven’t closed the business down, we’re just taking our foot off the gas at the moment – this is what many companies do at times like this as a means to hold on to cash. It is of course the exact opposite of what you are supposed to do. Now is the time to invest, but that is easier said than done when you’re staring a depression in the face. Every fibre of your being tells you to protect what you’ve got.
Personally, I’m sure we’ve made the right decision. The website was quite time consuming as well as trying to manage social media for it and at a time where, thanks to our respective industries, all of us are quite busy with what we do to make a living, we need to focus on that. There are going to be a lot of people out of work when this is done and we need to make sure they’re not coming for our jobs! It’s amazing what these situations can do to sharpen your focus. I remember feeling the same in 2008-09.
The Money Mountain will prevail!!
As for the rest of it, we’re still ploughing away with some of the less lucrative, but unaffected schemes. I’m doing my surveys, Chris is selling on eBay and Dave is still cornering the postage stamp market. Bitcoin has taken a beating which is going to hit our net worth. We’ll update in full next week.
In the meantime, we hope you’re all well, although I am sure some of you must have been impacted by COVID-19 in some way or another either health-wise or financially, or possibly both. You’re not alone…although I will level with you, I don’t know how much of a comfort that is at this time.
We’ll get out of this – we’re the plucky Brits!
You’ve summed up the worry and uncertainty nicely there.
I’m worried about what is to come, financially. Bank dividends were cancelled yesterday – billions of pounds of it. Whether that’s precautionary or because they know there is a huge storm of defaults coming, only time will tell.
I think there are several commentators out there looking at mortality rates, seeing them come down and seeing hope. I’m just concerned that things will be like this for a long while and lockdown is going to take its toll on the economy. The economy is going to get very messy and there will be an enormous tab to be picked up at the end of it.
But like you say, it’s difficult (and probably foolish) to guess the market too much.