If you are like the rest of the world, which you should be, since we are all on the same planet, you might be a little bit worried about the Coronavirus, and how it might affect you. When I say “affect you”, I am talking about your portfolio and your financial independence strategy. Let’s take advantage of the Coronavirus.
If you have been living under a rock for the past three months, there is quite the bug going around. Originating in China, where delicacies such as pangolin and bats are eaten, a borne super-virus has emerged, infecting as of 2/25/20 more than 80,000 people with 2,700+ deaths.
The virus has also sent world markets plunging more than 5-10% thus far. Now where do we take a stand when it comes to our portfolios? If you have been looking to acquire some new positions but were waiting for the perfect time to do so, this is your gift of the year. You can pick up some Apple stock for under $300. You aren’t going to get many opportunities to snatch up some prime tech stocks again.
Now, the recent pullback might have legs and dive deeper into the red. Here is our strategy to mitigate an increasing decline: legging into new positions. If you have been waiting on the sidelines with extra cash, you can leg into these positions 20% at a time. So, today, you would be buying 1% of your total position, tomorrow, another 1% and so on and so forth until you are at a full 5% allocation for a single position.
What this does is allows for us to continue buying on the way down, until fully allocated, without having to suffer the full potential downside. There is no way to time if this truly is a bottom, but we have pulled back enough to take advantage of the coronavirus in this current climate.
We have been on an epic bull run for the past decade, and as soon as there is a sign that this coronavirus is slowing down, stocks are going to rocket to the upside and more. Be ready with this strategy.