The sky is falling, or maybe that’s the stock market. Another way to look at it is that the stock market is having a sale!
If you believe this is the end of times, hold onto your cash. If you think we will weather this storm, go buy your self some VOO. That is Vanguard’s Exchange Traded Fund that roughly follows the S&P 500.
Three weeks ago, I reinvested some dividends into VOO at $310/share. I do this every quarter. Coronavirus happened. The stock market and my VOO took a dive. Ten days ago, I bought more at $277/share. That was a $33/share haircut. Ouch!
A week later, the market tumbled, and I bought more VOO at $252/share. Only three days later, this morning, the market decided it wasn’t finished. I bought more at $230/share. I wish I had a crystal ball that told me three weeks ago to wait. But no.
On those four purchases, the Dollar Cost Average per share is $267.
I take comfort in the history of the stock market. Have a look at the 2018 Morningstar Andex Chart. It shows the stock market has performed since 1926 against the back drop of world events. COVID-19 is a world event.
I don’t have a crystal ball. If you think we will come out of this fine in a couple months, you might want to buy into the market. The sale will end without notice. Oh, and wash your hands.
Here’s a downloadable PDF of the Andex chart: