Corona Virus investing and Pessach: It’s time for Matza

With less than two weeks to Passover and all the focus on Covid-19, it’s hard to believe that the holiday is fast approaching. Personally, I am writing this column from my home as I stopped going into my office on Wednesday. I wanted to experience what my wife has been going through dealing with a house full of kids and the first thing I can say is that she is a real trooper. After all, finding electrical outlets for every kid’s various devices to be charged in is worthy of parent of the year consideration! These aren’t easy times for anyone and everyone has their own challenges but I can tell you that it will pass, hopefully sooner rather than later.

 

A central aspect of Pesach relates to our current crisis. As I have written in the past, there are many differences between chametz, bread and matza. Rabbi Elchanan Adler in explaining the duality of mazta being both the bread of affliction as well as the bread hastily baked while leaving Egypt, writes, “We might suggest an additional explanation for the link between the dual aspects of matzah by examining the difference between the symbols of chametz and matzah. Chametz suggests haughtiness; matzah symbolizes humility. Chametz shows itself for what it is not – it is just fluff! Matzah is what it appears to be, without any pretensions. It is easy to see why matzah is associated with slavery. A slave is naturally humble. He has nothing to boast of. He has little sense of self. However, once liberated and given a chance to express his potential in the world, it is easy for the slave to become arrogant, self-centered and status-conscious. Therefore, the Jews needed to preserve the symbol of matzah even after their liberation, so that they could retain an appropriate measure of humility even after their liberation.” 

 

Corona

 

As we are bouncing off the walls on lockdown, and running outside - umm I mean walking outside - taking advantage of our 100 meters we should take the time to do some introspection. What has become of us? Have we become too full of ourselves and driven away friends? If so maybe we can get something good out of this lousy situation and improve ourselves.

 

Another element of only eating matza is for us to get back to basics, and to create a proper structure for us to grow as human beings, without any of the extra trappings symbolized by bread.

 

So what does any of this have to do with investing? It’s time to get back to investing basics. Use this time to clean up anything that really shouldn’t be in your portfolio. Take a look at your portfolio. Have you skewed from your optimal asset allocation? Is your portfolio a hodgepodge of random stocks that were bought on a whim, but with no underlying strategy?  Do you own stocks that you won’t sell because you are “waiting for them to go up to where you bought them?”

 

I’ve received many calls recently from individuals wanting to take advantage of the massive stock market drop. When they ask what to invest in, I say keep it simple. No need to get really creative. Rather either buy broad-based market tracking ETFs or large, well-known companies.

 

The world is always in a state of change, and we are sure feeling that now with corona. Investors should take the time to make sure that their portfolios are well positioned for current conditions. Be smart about your investments. Pick a strategy and stick with it. Owning random stocks with no strategy is a recipe for disaster, and even though you may have emotional reasons to hold onto certain positions, now is the time to put emotions aside and get rational. And keep in mind that markets go up and down. Sometimes those downs can be violent and financially painful. If you have a well-designed portfolio, over time, things will probably work out well.

Now is the time to get back to basics. And remember, better start cleaning!