COVID-19: What you value is now exposed

I don’t know how I spotted this outside my building..!

As I’m writing this article, I’m stuck at home for about a month now, only going for the occasional walk and the visit to the grocery store. I would have skipped the big supermarkets too but online deliveries are a rare find these days here in London.

I was never a party person, quite an introvert to be honest. Hell, even my own meetups feel slightly uncomfortable to organise!

But even for someone like me, staying at home is tough. I occasionally have the so-called cabin fever and going for walks/exercise helps. Besides the difficulties of trying to work with a baby in the house, I think staying at home for a month changes how we think.

For starters, staying at home makes you realise what you miss and what you don’t. For example, although I was a regular restaurant type, I don’t miss it much, if at all. What I miss are the friends and our get-togethers but not the actual food or alcohol.

My social life is super important to me. I miss the home gatherings. The restaurants, not so much.

We used to cook at home a lot anyway so that hasn’t changed.

Then I miss playing football with friends. We have a great time which relieves stress and gives us a good type of muscle pain for a few days. Watching live sports is another one.

Staying at home forces you to spend so much time with the family. Not everyone likes it. At one extreme, domestic violence has sadly gone up during COVID.

I had never spent all day every day with them for a month and I must admit I quite like it. Sure, I miss some me time though. But as long as there’s a balance I’m quite happy. Even having lunch with them and a short walk in the afternoon makes life better.

I miss going to the office. I can speak all day about how post-FIRE must be better than pre-FIRE but going somewhere regularly still adds value. Maybe, like Morgan Freeman, I’ve become too institutionalised?

I don’t miss getting dressed for the office though.

One can argue that you can always find a regular “office” after FIRE. Can’t argue with that.

I can’t say I miss travelling, as it’s only been like that for a few weeks. But if you tell me I can’t travel until August, I’ll certainly miss that. We just cancelled a 2-week trip that could’ve been a very good experience.

So overall, staying at home makes me realise we live very simple FIRE-y lives. Life is centred around friends, family and experiences which means I should keep focusing there because this is what makes me happy.


What are some things you really missed during the lockdown?


Such a weird quarter. Many people have faced a “personal recession”, either because their businesses lost major income, they were made redundant etc. Which is why it’s so hard to keep investing during the crisis.

If like me, you’re one of the lucky ones to keep your income then you probably have a higher savings rate than usual. And more to invest at cheaper prices.

We experienced a -35% stock market fall. Property Partner has stopped paying dividends for 3 months. This doesn’t surprise me as almost half of UK companies have scrapped payouts too. No place to hide for risky assets. If people can’t pay, they can’t earn.

But the recent crash we experienced taught me that psychologically, I can withstand much bigger losses.

Sure, I was afraid but not too afraid to look at my portfolio, sell or change my strategy. In fact, I kept investing. Does this mean I should probably have a more aggressive portfolio going forward? If I’m not swimming naked, am I wearing too many clothes?

Then a 60% equity allocation is the maximum to go for if you want to FIRE in 5 years or less. Which means that from a sequence of returns risk perspective, I should not change my allocation. I’m not making any changes for now and sticking to the plan.

The unbelievable support of all governments to save the economy has surprised me. Governments around the world pay households and the businesses employing them. In the US, the Fed has effectively guaranteed that it’ll pour money as long as needed to provide bond liquidity. The markets took a very positive stance which is why the S&P 500 is only -17% from its pre-COVID levels. Astonishing.

This all comes at a cost and the magic money tree will have to be paid back probably in the form of future taxes. But that’s necessary as long as we kill the virus first. Can’t spend your money if you’re dead.

Michael Batnick got me thinking. What if the stock market has become less risky going forward?

If the stock market during the worst economic contraction in 90 years can be smoothed out by government spending and Fed actions, does this change the risk-return framework in the stock market going forward?

One can argue that this is a humanitarian crisis so they’ll do everything they can to keep the markets running smoothly. However, what if they don’t let businesses fail next time round when it’s a housing crisis, oil crisis etc? As Gallaway says, are we capitalists on the way up but socialists on the way down?

Should markets be more expensive because of that? In any metric, the stock market is overvalued compared to historical averages. Is the overvalued stock market justified because it’s safer from a 1929 depression-like fall?

All things considered and with negative rates all around us, is this another call for a more aggressive portfolio?

To conclude, I think the terrible situation we’re going through provided us with some positives too:

  • Identify what we really value and what to change when we get back to normal
  • Fine-tune our portfolio according to our true risk-tolerance

What about you?

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    12 thoughts on “COVID-19: What you value is now exposed”

    1. Thank you, Michael for another post and musings.

      Since starting my Ltd company consultancy over five years ago, I mostly work from home with occasional travel abroad or clients offices, but last three years have been mostly remote. Therefore, the lockdown was not a big change for myself or my family, as they are used to having me around. However, the current situation, as you pointed out has made me appreciate the things I love, cherish and care about even more.

      Coming down to investing, I am beginning of my journey, and in fact after having paid all our debt in my early forties I just started thinking about investment, and that’s the reason I bumped into your blog and posts. I agree with you that sometimes while in the middle of bull run we forget it may be like to see investment values plummet and into my first month of investment it was good lesson, and something worth remembering for rest of our lives if and when we come at the other end of it. I plan to keep on investing small amounts after having done a lump sum to start with and perhaps a dollar cost averaging may be the best thing to do as the market will go up and down, depending on earnings and investor sentiments in near future. However, in the end of days, as Tim Hale said, we have to trust the capitalism in the long run.

      Ps. I have taken time to read books you suggested, starting with Tim Hale and Winning the Loser’s game.

      • With so much WFH you may want to share some tips with us PP78! I found that having a regular routine is important otherwise you end up working all the time. Also, it’s easy to forget to take breaks. Sometimes I’ll spend 3 hours looking at the screen. Having a standing desk helps I must admit.

        May your investing journey be prosperous. I think DCA is a very good strategy going forward. Can’t blame you for lump sum investing in the beginning. Although unlucky this time, it’s the correct play from a math point of view.

        • Thank you, Michael.

          Been using standing desk for all this time, and I did not get an adjustable one on purpose as I did not want to give myself a choice of sitting down. It forces you to take regular breaks. Playing with children has helped, whenever I get a chance to take a break, and before lockdown popping into gym first thing in the morning was priceless.

          Fortunately, I caught the dip of the market in the second and third week of March so I am happy so far as value of investment has gone up since the rally, however, lesson I mentioned was the fall prior to that. Although not directly affected, this was a really useful reminder. Another tip following reading your posts was to create a spreadsheet, and I played around with it to add frequent market crashes and corrections at different points. One of the lesson for me to avoid the mistake of optimistic returns over the long run, as it never happens in practice. Jonathan Hobs from has a couple of good spreadsheets that help you calculate DCA for different funds and I suggest you look into that.

          Thank you so much for giving me the inspiration and direction and I am looking forward to FIRE journey.

    2. Hi Michael
      I too have found that this has given me time take stock and think about what’s important to me. A few years back i used to enjoy having friends over for dinner and we’d spend the afternoon chatting and laughing around the table. In latter years i’ve not done that and instead been going out for meals alot. I have realised how much money i was wasting on this when i could have got everyone together at mine for dinner which creates a more memorable time anyway.
      I used to really enjoy spending time pottering in the garden, this again had gone by the wayside because i was always too busy. During lockdown i’ve spent alot of time out there and have been growing lots of veg, you can’t beat the taste of home grown veg. Something i else i will continue to make time for after all this.
      My daily walks i’ve been taking on footpaths around the farm fields, footpaths although pretty much on my doorstep i didn’t know were there. I have found that i can make my way to various places i visit with hardly setting foot on the road. So much nice countryside to explore that i wouldn’t have taken the time to find without this slower pace of life.
      With my job its given me time to think and after being there for a year and still having no contract, no workplace pension, having accrued holiday pay restricted by 50% among other things i realise how little I am really valued there, so maybe time to look elsewhere.
      With investing, I must admit I did jump out on a couple of the individual shares I had and still feel that I did the right thing there, but investments such as Vanguard that I had monthly payments set up I have continued. Overall i’m not down by too much so not a big a hit as some, although the 3 months of no dividend from Property Partner is a bit of a kick in the teeth but understand why they need to do that.

      • Amazing story, Sharon. Having a garden is priceless right now… And I think the weather has changed so much in the UK lately that you’re going to enjoy it more and more going forward.

        It’s funny you talk about unexplored footpaths. My parents just told me that they discovered a path which leads to a picturesque little river full of nature. It’s 15-30 min walk from their house. How long have they been living there? 30 years!! But too busy with work to go around.

        They also never took more than a week of holiday per year, until now. Couldn’t help but share the picture they sent me (Rhodes, Greece):

        Rhodes, Greece

    3. Hey Michael!

      To be honest, most of all I miss the situation just being normal. Keeping 2m distance, don’t touch anything, trying to order something online.. All of a sudden I am aware about anyone who sneezes or coughs 😀 Not great :)) But then again, this is nothing compare to people actually hit by the virus, so cannot really complain!

      In terms of investing, my allocation of 70/30 is apparently okay for me. I haven’t though about selling and so on. I am actually more anxious about how can I take advantage of the situation.
      This sentence “Then a 60% equity allocation is the maximum to go for if you want to FIRE in 5 years or less.” got me thinking. Can you recommend a book or other resources about asset allocation in terms of FIRE? Or how did you come up with that number yourself?


      • Hi Martin,

        Smarter Investing by Tim Hale is really good book, if you have not read that already.

        Permanent Portfolio as another good book.

        • Hey Peter,

          Yes, I’ve read the Tim Hale’s book. It’s really good! But I think he only spoke about the asset allocation in your accumulation phase. I don’t think he spoke much about how to allocate when you are close to retirement.
          I haven’t checked the other book, I can give it a go!


          • Hey Martin, the 60% maximum stock allocation before retirement comes from EarlyRetirementNow analysis on the subject.

            I can’t recall the exact place there are like 40 articles on it. If there was a Nobel prize for Safe withdrawal rates, he would be the guy!

            A *very* good book on de-accumulation is McClung’s Living Off Your Money. I should probably put it 3rd on the list of FIRE resources.

            The idea is that we want to protect ourselves from big portfolio losses just before and after retirement. Think 5 years before and 5-10 years after (depending on retirement expected horizon). Otherwise, we risk experiencing a big drop combined with selling stocks to fund retirement. Which is a recipe for depleting your fund much faster than expected.

    4. Hi Michael,

      I hope you and your family are staying safe! Definitely strange times, it took us all by surprise too. You’d think that you would be able to tell when an economic recession is approaching but here’s the proof that anything can suddenly happen.

      I took the opportunity to open a stocks and shares ISA and I managed to put some money in around a month ago. I couldn’t put much as I still haven’t been able to find a contract (coronavirus just after IR35!!), but I’ve already made a nice profit =)

      We also decided to pause the purchase of a property we were going to buy as an investment. Not only it would be difficult to let it out at the moment but if we’re really heading to a recession property prices might go down.

      Let’s hope things get better soon!

      • Hope you find a contract soon, Mara. Indeed unprecedented times…

        But opening an ISA now is probably a good thing, should pay off in a few years time. I’m still surprised the stock market has held up so well given the circumstances…


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