Blood in the Streets

     Over one hundred years ago, Baron Rothschild is credited with saying that the time to buy is when blood is running in the streets. After the last three sessions in the stock market, it seems like blood (or red ink) is flowing freely. Almost every sector is being punished for having rich valuations and potential risks related to the corona virus that is spreading across the developed world. People are desperately seeking advice on what they should do with their money. My opinion is that even if this market continues to correct, the time to sell most positions has passed. Leisure and transportation stocks have been the most severely impacted and will continue to  endure pain for a long time going forward. People are cancelling vacations and business trips in record numbers. Some areas are locked-up due to quarantines, and airlines have cancelled flights to many of the impacted areas. Drug and technology companies have had supply chain disruptions because they sourced many needed materials from affected areas. At the time of this writing, the Dow Industrial Average has dropped nearly 3,000 points or about 10%. While I can't say that I expected this to happen, I have hedged my bets in this market by maintaining a portfolio of laddered CD's that are federally insured and safe and sound. This strategy protects me from ruin if the market continues it's decent and also protects my family's future if anything happens to me. Even though I am not thrilled with the yield on these products, I believe that later this year the interest rates paid by banks will go down even more. The Federal Reserve Bank will surely react to this financial crisis by lowering the fed funds rate even further to prop-up our economy. As far as this crisis being a buying opportunity, my buy list was already in place in the form of limit orders at my discount broker. Today two orders were executed at prices that I previously thought favorable. In summary, this too shall pass, just like every other crisis. Nobody knows when, but it will. It may take a long time for stocks to recover to their previous highs but for long term investors, this is a great time to buy some discounted stocks on your list.