I have been working from home for the past two weeks. To be perfectly honest, I thoroughly enjoy it! Working from home means skipping the daily commute that takes up considerable time, effort and money. Now, all that is required is to just wake up, get out of bed and turn on the laptop. Did I also mention it is so much cheaper to eat at the nearby hawker centre instead of the CBD?
That said, I am weary of the slower pace of work where clients are delaying meetings and projects. Notwithstanding, I also consider myself lucky to be working in a relatively large company. I am a salaried employee, largely shielded from external market forces and do not expect my company to be axing jobs due to the slowdown. One thing, however, is on my mind – Will my bonus this year be impacted (even though it is for last year’s good work)? Can we still hit our targets this year? If not, how will next year’s bonus be like?
Obviously, I have more time to take a step back and think about life and the future. This virus outbreak could be the catalyst that triggers the next downturn. We see Singapore, Japan and China facing recession risk, the result of which would spill onto other nations as well. Therefore, in order to get ready for a possible recession, I am doing the following:
- Adjust StashAway Risk Index from 36% to 30%. This is to mainly reduce allocation to US technology stocks (which have been on a tear) and increase allocation to gold and consumer staples.
- Build up cash buffer. I have significant market exposure as the majority of my net worth is in the investment portfolio and there is no intention to sell any position just yet. While I will continue to contribute to my regular savings plans, it is time to build up the investment war chest.
- Accept volatility to be the new norm. With no cure to the virus in sight and containment as the only option, any news can push the stock prices in either direction. A 1% gain today can be easily cancelled by a 2% loss tomorrow. It is therefore important to have the right mentality and accept that volatility is high during this period.
A colleague based in Beijing shared that the situation is much better than before and expects things to return to normal in mid-March except for the Hubei province. I sincerely hope he is right.
Road To FIRE 