Sunlight Doesn’t Kill The Virus

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There are an unknown number of Americans who have been or are infected with COVID-19 coronavirus, but experienced either mild or no symptoms. And, despite the flattening of the infection curve and the reopening of states’ economies across the country, it is important to remember that the virus has not gone away.

Additionally, many of the largest outbreaks have been in regions where the weather is cooler, leading to speculation that the disease might begin to tail off with the arrival of summer. However, health experts are uncertain that the spread of the coronavirus will diminish, or take a sabbatical like the seasonal influenza, with the arrival of the heat, humidity and sunlight of summer.

Sunlight contains three types of ultraviolet light — UVA, which tans and ages your skin, and can cause eye damage; UVB, which burns and also ages skin; and UVC is harmful and quite good at destroying genetic material.

There is no data on whether the UVA rays of the sun can inactivate this coronavirus. However, research on SARS, another coronavirus, found that exposing that virus to UVA light for 15 minutes did nothing to reduce its spread

In contrast, UVC light has proven to be more promising versus the coronavirus. This relatively obscure part of the spectrum consists of a shorter, more energetic wavelength of light. It is particularly good at destroying genetic material – whether in humans or viral particles. Fortunately, UVC is filtered out by ozone in the atmosphere long before it reaches a person’s fragile skin.

So, the takeaways are to stay safe, practice social physical distancing , wash your hands frequently and wear a face mask when out in public.

References:

  1. https://www.gatesnotes.com/Health/Seattle-Coronavirus-Assessment-Network?WT.mc_id=20200512100000_SCAN_BG-EM_&WT.tsrc=BGEM
  2. https://www.npr.org/sections/goatsandsoda/2020/04/17/836830157/coronavirus-faqs-can-sunlight-kill-the-virus-how-risky-is-an-elevator-ride
  3. https://www.bbc.com/future/article/20200323-coronavirus-will-hot-weather-kill-covid-19

50/15/5: a saving and spending rule of thumb | Fidelity Investments

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It isn’t about managing every penny. Track your money using 3 categories.

FIDELITY VIEWPOINTS – 03/03/2020

Key takeaways

  • Consider allocating no more than 50% of take-home pay to essential expenses.
  • Try to save 15% of pretax income (including employer contributions) for retirement.
  • Save for the unexpected by keeping 5% of take-home pay in short-term savings for unplanned expenses.

Budget…the 50/15/5 rule is Fidelity’s simple rule of thumb for saving and spending: Aim to allocate no more than 50% of take-home pay to essential expenses, save 15% of pretax income for retirement savings, and keep 5% of take-home pay for short-term savings. (Your situation may be different, but you can use our rule of thumb as a starting point.)

Why 50/15/5? Fidelity analyzed hundreds of scenarios in order to create a saving and spending guideline that can help people save enough to retire. Their research found that by sticking to this guideline, there is a good chance of maintaining financial stability now and keeping your current lifestyle in retirement. To see where you stand on our 50/15/5 rule, use our Savings and spending check-up.

Essential expenses: 50%

Some expenses simply aren’t optional—you need to eat and you need a place to live. Consider allocating no more than 50% of take-home pay to “must-have” expenses, such as:

  • Housing—mortgage, rent, property tax, utilities (electricity, etc.), homeowners/renters insurance, and condo/home association fees
  • Food—groceries only; do not include takeout or restaurant meals, unless you really consider them essential, i.e., you never cook and always eat out
  • Health care—health insurance premiums (unless they are made via payroll deduction) and out-of-pocket expenses (e.g., prescriptions, co-payments)
  • Transportation—car loan/lease, gas, car insurance, parking, tolls, maintenance, and commuter fares
  • Child care—day care, tuition, and fees
  • Debt payments and other obligations—credit card payments, student loan payments, child support, alimony, and life insurance

Keep it below 50%: Just because some expenses are essential doesn’t mean they’re not flexible. Small changes can add up, such as turning the heat down a few degrees in the winter (and turning your AC up a few degrees in the summer), buying—and stocking up on—groceries when they are on sale, and bringing lunch to work. Also consider driving a more affordable car, carpooling, or taking public transportation. Consider a high-deductible health plan (HDHP), with a health savings account (HSA) to reduce health care costs and get a tax break. If you need to significantly reduce your living expenses, consider a less expensive home or apartment. There are many other ways you can save. Take a look at which essential expenses are most important, and which ones you may be able to cut back on.

Retirement savings: 15%

It’s important to save for your future—no matter how young or old you are. Why? Pension plans are rare. Social Security probably won’t provide all the money a person needs to live the life they want in retirement. In fact, we estimate that about 45% of retirement income will need to come from savings. That’s why we suggest people consider saving 15% of pretax household income for retirement. That includes their contributions and any matching or profit sharing contributions from an employer. Starting early, saving consistently, and investing wisely is important, as is saving in tax-advantaged retirement savings accounts such as a 401(k)s, 403(b)s, or IRAs.

How to get to 15%: If contributing that amount right now is not possible, check to see if your employer has a program that automatically increases contributions annually until a goal is met. Another strategy is to start by contributing at least enough to meet an employer match, and then if you get a raise or annual bonus, add all or part of these funds to your workplace savings plan or individual retirement account until you have reached the annual contribution limit.

Short-term savings: 5%

Everyone can benefit from having an emergency fund. An emergency, like an illness or job loss, is bad enough, but not being prepared financially can only make things worse. A good rule of thumb is to have enough put aside in savings to cover 3 to 6 months of essential expenses. Think of emergency fund contributions as a regular bill every month, until there is enough built up.

While emergency funds are meant for more significant events, like job loss, we also suggest saving a percentage of your pay to cover smaller unplanned expenses. Who hasn’t been invited to a wedding—or several? Cracked the screen on a smartphone? Gotten a flat tire? In addition to those there are certain category of expenses which are often overlooked, for example; maintenance and repairs of cars, field trips for kids, copay for doctor’s visit, Christmas gifts, Halloween costumes to name a few. Setting aside 5% of monthly take-home pay can help with these “one-off” expenses. It’s good practice to have some money set aside for the random expenses, this way you won’t be tempted to tap into your emergency fund or tempted to pay for one of these things by adding to an existing credit card balance. Over time, these balances can be hard to pay off. However, if you pay the entire credit card balance every month, and get points or cash back for purchases, using a credit card for one-off expenses may make sense.

How to get to 5%: Having this money automatically taken out of a paycheck and deposited in a separate account just for short-term savings can help a person reach this goal.

Read more: https://www.fidelity.com/viewpoints/personal-finance/spending-and-saving

Value Investing

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“It is only in a bear market that the value investing discipline becomes especially important because value investing, virtually alone among strategies, gives you exposure to the upside with limited downside risk.” Seth Klarman

Value stocks have historically been considered one of the most successful ways to invest for long-term investors in the equity markets. Value investing is a long-term investment strategy whose basic concept is to identify stocks that represent bargains or whom stock price are deemed cheap, and hold the stock decades. This is usually because such companies are out-of-favor with the consensus investors.

Stocks are considered to be undervalued based on several metrics. Those metrics can include a price-to-earnings ratio lower than their industry-standard, below average price-to-book ratio, or an above average dividend yield.

Value investing, according to investing guru Benjamin Graham, involved seeking stocks that were selling at an extraordinary discount to the value of the underlying assets, which he called the “intrinsic value”.

Billionaire investor Warren Buffett embraced the value investing concept, but took it a step further. Unlike Graham, he wanted to look beyond the numbers and focus on the company’s management team and its product’s competitive advantage in the marketplace.

Two essential principles behind value investing over the long-term, meaning decades, are:

  1. If you buy a stock for less than it’s true worth, the stock’s price will eventually converge with it’s intrinsic value; and
  2. If you buy a wonderful business, the value of that business will compound and increase exponentially the longer you hold on to it.

The most important thing to understand is that value investing requires a long-term mindset. Renowned economist John Maynard Keynes once said, “The market can remain irrational longer than you can remain solvent.” The lesson is that while occasionally one’s timing is fortunate and an investment pays off very quickly, even a value-focused strategy doesn’t guarantee quick gains.

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” Ben Graham

Mr. Market doesn’t always “realize” very quickly that it was wrong about a stock or that it undervalued an asset. But, over the long-term, Mr, Market tends to abide by a company’s fundamentals such as earnings growth.

For most retail investors, stocks, from the truly long-term 30-year perspective, are safer than bonds.

References:

  1. https://www.vintagevalueinvesting.com/8-investment-tips-for-beginners-from-warren-buffett/

Unemployment Insurance Claims Increasing

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Unemployment insurance claim filings continue there unprecedented increase.

Another 2.9 million Americans filed for unemployment the previous week in May. This brings the total to 36.5 million people whom have filed for jobless aid in the two months since the coronavirus and state governments forced millions of businesses to close their doors and shrink their workforces according to the Labor Department.

Unemployment stood at 14.7% in April, the most recent month for reporting. 

Recovering From Coronavirus Might Take Longer Than Expected | WSJ

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Understanding how the body clears the new coronavirus is becoming more important as the U.S. begins to reopen. WSJ’s Daniela Hernandez explains how the body fights infection and why feeling better doesn’t equal being virus-free.

Photo illustration: Laura Kammermann

https://www.wsj.com/video/why-fully-recovering-from-coronavirus-might-take-longer-than-expected/985A51E7-D3C9-4375-BC3B-9E5E2E03691E.html

6 habits of successful investors| Fidelity Investment

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Planning, consistency, and sound fundamentals can improve results.

FIDELITY VIEWPOINTS – 03/19/2020

For most people, achieving success as an investor means reaching their financial goals, like owning a home, paying for college, or having the retirement you want.

What separates the most successful investors from the rest are habits. It is the reason why some individuals successfully accumulate wealth while others seem unable to save and invest successfully. Essentially , it can be traced back to daily habits.

Here are the 6 habits of successful investors that we’ve witnessed over the years—and how to make them work for you. Read more: https://www.fidelity.com/viewpoints/investing-ideas/six-habits-successful-investors?immid=100864&imm_pid=272043316&imm_aid=a466972197&dfid=&buf=99999999

Investing can be complex, but some of the most important habits of successful investors are pretty simple. If you build a smart plan and stick with it, save enough, make reasonable investment choices, and be aware of taxes, you will have adopted some of the key traits that may lead to success.

References:

  1. https://grow.acorns.com/7-daily-rich-habits-anyone-can-adopt/

The Vestiges of Spending and Debt

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“Debt means enslavement to the past, no matter how much you want to plan well for the future and live according to your own standards today. Unless you’re free from the bondage of paying for your past, you can’t responsibly live in the present and plan for the future.” Tsh Oxenreider, Organized Simplicity: The Clutter-Free Approach to Intentional Living

Debt is often described as a four-letter word, burying borrowers with substantial balances and double-digit interest fees. And for many Americans, that’s the case.

Living with and accumulating debt has always been an almost certain path to financial ruin and can be a recipe for disaster. Debt can be sneaky. It is difficult to get ahead financially when you don’t have enough money to pay for something and reaching for a credit card to fund. It is no way to live in the short or long term.

Debt eats away at disposable income and limits the borrower’s ability to meet other financial goals, such as saving and investing for retirement. It also forces those who carry a monthly credit card balance to overpay for consumer goods — including furniture, clothes, and flat-screen TVs — due to the interest charges that accrue.

But debt isn’t just credit cards. It comes packaged as student loans, car payments, store credit cards, home mortgages, personal loans, business loans, payday loans, and even “buy now, pay later” deals. Essentially, anytime you owe somebody else money for anything—it’s debt.

It’s important to give debt the boot for good. First, stop taking on any kind of new debt. That means stop paying for goods and services with a credit card to make ends meet, stop leveraging your future to pay present. Stop living beyond your means.

You can’t get out of debt if you keep adding additional purchases and expenses to it. Instead, start focusing on paying off your debts with the smallest to largest balances.

Stop living with debt.

Anytime you owe somebody else money for anything—it’s debt.

Paying off debt continues to be one of the most pressing financial goal for Americans. A 2018 Transamerica Center for Retirement Studies found that nearly a third (31%) of survey participants stated that eliminating bad debt was their number one financial goal.

Paying off bad debt, and debt in general, is extremely important for consumers. It can be difficult to save for retirement and other long-term goals when a big chunk of your money is going toward debt repayment. That’s why it’s important to have a financial plan that details how to get out of debt—it can save you money in interest and ultimately help you save more money and reach your goals faster.

Student loans, credit card balances, car loans, and mortgages all represent types of debt that typical consumers must pay off. It’s important to make sure to pay at least the minimum required—and on time—to keep all loans in good status. After all, defaulting on credit cards, car loans, student debt, or home mortgages can destroy your credit rating, and risk bankruptcy.

Debts are negative bonds

A fixed rate mortgage acts like a bond with fixed payments. But, the exception is that you are the one issuing the bond instead of buying it, which makes it a negative holding. Debts are like negative bonds, you’re making interest payments in addition to principal.

A bond is an investment in which you expect to get back your initial investment (principal) plus some interest. Conversely, a mortgage is a promise to pay back the borrowed amount (principal) plus some interest. Thus, it appears to be that a mortgage and all consumer loans are basically just a negative bond.

Viewing mortgages, automobile loans or student loans as a negative bond, where you are paying interest to the loan holder instead of collecting it, might change a person’s mindset regarding debt. Indeed, paying off debt almost always garners a higher after-tax return than you can earn by investing in high-quality bonds.

Before you tackle debt, pay yourself first.

Use tax-advantaged accounts like a flexible spending account or a health savings account if you have a high deductible health plan. That lets you pay for medical bills using pre-tax money.

Save enough in a workplace retirement savings plan to get the match from your employer—that’s “free money.” Set aside some cash for emergencies.

Assuming you are meeting those primary obligations, here’s a guide to help you pay off debt while saving for emergencies and long-term goals like retirement. It may seem counterintuitive, but before you tackle debt, make sure you have some “just in case” money and save for retirement.

It can be easy to run up a large credit card balance. And once you do, it’s not easy to pay it off. The minimum payments are typically low, which means you are paying mostly interest, so it will take much longer to pay off the balance. And it will cost you more. So if you can, consider paying more than the minimum each month.

Debt and Credit Reporting

Once a delinquency has been reported to a collection agency, paying it off won’t help your FICO score. The damage has already been done, and the blemish will remain on your credit report for seven years.

At this point, it is recommended that you negotiate with the debt collector so you can repay a smaller amount and keep more of your savings. Creditors will often accept far less than what is actually due. One important caveat: When you negotiate a lower payment, the IRS usually counts the forgiven amount (what you’re not required to pay) as income, which means that you’ll owe taxes on that money.

Take pleasure in saving.

Personal Financial guru Suze Orman states that the most important piece of advice she can provide regarding debt is that, “Until you can feel more pleasure from saving than you get from spending, you are going to be tempted to spend money you don’t have.” Essentially, until an individual makes saving a priority and core objective, they will be fighting a uphill battle to curb spending and to ensure the spending remains below the earnings.

It worth repeating the fact that Americans have a spending problem. Every research and survey conducted on the subject of debt reveals that conspicuous spending, or in the vernacular of a former Federal Reserve Chairman, conspicuous consumption has long been a concern of economists in American. Many of the bursting economic bubbles over the past dozen decades can be directly contributed to Americans getting over their proverbial skies with respect to debt and spending more than they earn.

Debt for appreciating and income producing assets

If used properly, debt can potentially provide the leverage to accumulate income and producing assets wealth. Very few people could afford to purchase a primary residence without a mortgage loan.

Not all property appreciates in value, of course, but for most Americans, their primary residence is their single largest asset. As of 2018, U.S. homeowners are sitting on a record $15.2 trillion of “tappable equity,” defined as the total amount of equity a homeowner with a mortgage can borrow against their home, according to Magnify Money by Lending Tree.

  1. https://www.fidelity.com/mymoney/ditch-debt-and-start-saving?ccsource=Facebook_YI&sf228845371=1
  2. https://www.transamericacenter.org/retirement-research/19th-annual-retirement-survey
  3. https://www.suzeorman.com/blog/Americans-Say-Paying-Off-Debt-is-Their-Top-Goal

Staying Physically Active and Socially Connected

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Physical distancing, not social distancing is mandated

Blame psychology for why many Americans still cannot accept the gravity of the coronavirus pandemic.

  • First, foresight is not a particular skill for most of us, experts say.
  • And “live free or die” is more than a slogan; it’s an apt description for the mindset of many Americans.
  • Finally, it is hard to assess the threat of an enemy you can’t see.

American mindset is another reason it’s so hard to enforce strict public health measures. Americans are independent-minded and don’t willingly sacrifice personal freedom for the sake of the wider society. That’s especially so for people who distrust science, detest government regulations and have never seen a situation like this pandemic with their own eyes.

Image of SARS-CoV-2, virus that causes COVID-19

Social Distancing

With the advent of the pandemic, we have been hearing a lot about “social distancing”, which according to governments and medical authorities mean we should keep at least 6 feet apart from others, as much as possible.

But clearly, it’s about keeping your physical distance at least six feet from others and not about increasing your social distance from family, friends and neighbors.

Governmental authorities screwed the pooch on the phrasing of social distancing. The term “social distancing” is not only a misnomer, it is exactly the opposite of what people should do during the current pandemic.

During a time of great fear and uncertainty, it’s important to stay connected to people that matter most in your life. Whether it be with friends or family, social interaction is important for communities. It keeps us feeling like we’re all a part of something greater than ourselves.

Stay Physically and Socially Active

Staying active can help you stay healthy both physically and emotionally. Take a walk. Take a virtual exercise or dance glass.

Staying socially connected is an important part of our emotional health. Human beings are social animals. Man was not created to be or exist alone. Most people need a certain amount of social interaction every week, or they start to feel isolated and alone. Social interaction can still occur, even as we retire and age. It just needs to occur in a different way when compared the our working years .

And remember, we must keep our physical distance to hinder the virus spread. But, we must stay emotionally and socially connected with our family and friends. Go out of your way to reach out to those who are socially alone and isolated.

We are in this together and awe will overcome this together. As a result, you should keep a physical distance at least 6 feet apart from others, but clearly this has nothing to do keeping socially distant from others. Instead, it’s all about keeping your physical distance from others.

References:

  1. https://psychcentral.com/blog/alone-together-why-its-physical-distancing-not-social-distancing/
  2. https://www.stripes.com/news/us/the-psychology-behind-why-it-s-hard-for-us-to-accept-a-pandemic-1.628550#

YOUR GUIDE TO RETURNING TO “NORMAL”

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by Andrea Klemes, DO, FACE, Chief Medical Officer

With various states and the federal government considering easing social distancing restrictions and reopening segments of the economy, it’s important to remember that the coronavirus hasn’t gone away. That means if you’re in a high-risk group – or come into contact with people who are in a high-risk group — you still need to take substantial precautions, just as you have been for the last month or so.

Why do you need to be cautious? There is still a lot that scientists don’t know about the disease. For example, if you have had it, are you immune to it? Early studies are inconclusive. How widespread is the disease? Many people who have had the virus have never been tested, and studies show that they can spread the virus before symptoms show and even if they show no symptoms at all.

There is also no vaccine or effective treatment, and COVID-19, the disease caused by the virus, is still very dangerous.

So how do you ease back into a more normal life? Here are some tips.

Am I high risk?
When the virus was first circulating in China, researchers believed that people over 65 and those with lung conditions, diabetes, heart disease and cancer — and any diseases that compromise the immune system — were at greater risk for developing life-threatening complications from COVID-19. This is still largely true, but new research has pointed to other risk factors, even for young people.

Obesity, especially, accounts for a high number of severe COVID-19 cases, according to new studies. People with high blood pressure have also been hit hard by complications from the disease. People who smoke are also adversely affected by the disease. And men are at greater risk. In fact, a study in New York found that 62 percent of hospitalized patients were men. Researchers aren’t sure if gender is playing a role or if the risk men face is more related to lifestyle choices they have made.

So, who is most at risk? According to the Centers for Disease Control and Prevention, it’s:

  • People who are 65 or older
  • People with chronic lung disease or moderate to severe asthma
  • People who have serious heart conditions
  • People who are immunocompromised (undergoing cancer treatment, smoking, bone marrow or organ transplantation, immune deficiencies, poorly controlled HIV or AIDS and prolonged use of corticosteroids and other immune weakening medications)
  • People with severe obesity, a body mass index of 40 or higher
  • People with diabetes
  • People with chronic kidney disease undergoing dialysis
  • People with liver disease

Each of these conditions is different, but the CDC has put together advice on managing these specific risks during the outbreak.

While being older than 65 is also a risk factor, the data shows that 25 percent of Americans hospitalized with COVID-19 are under 50. It also shows that many of these younger people had conditions like asthma, hypertension and diabetes.

If you fall into a high-risk group (or even in a low-risk group) …
Before going out, talk to your doctor. Make sure you follow his or her advice. If you have a chronic condition that raises your risk, work with your doctor to make sure your numbers are good and that you’re taking your medication. Uncontrolled type 2 diabetes, for example, can make you more susceptible to infections, colds and the flu. High blood sugars can weaken your immune system.

You should also be prepared to take extra precautions. Start with these steps:

Continue to practice good hygiene. Washing your hands, wiping down surfaces and using hand sanitizer are important.

Wear a mask and wear it right. Masks haven’t been shown to offer full protection (don’t expect your mask to make you invincible), and they offer even less protection if you don’t wear them correctly. Here are some tips for wearing a mask.

Maintain social distancing. After spending so much time at home, the temptation to go to dinner at a restaurant or have friends over or visit relatives is high. Resist it. You can control your exposure, but it is hard to control other people’s exposure.

One thing researchers have learned is that the coronavirus spreads easily and especially in close quarters. Staying out of situations where you are exposed to people in tight confines will lower your risk.

If you can keep practicing social distancing, do it. You’ll be safer for it.

Finally, if you want to take advantage of parks, beaches and other places where people gather, go there when they are the least crowded. This is true of stores and restaurants and anywhere people gather. If you have to go out, go when things are the most quiet. This should also help lower your exposure.

Difference Between a Bear Market and a Recession | Barron’s

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The U.S. has almost certainly fallen into a recession from the fallout of the coronavirus pandemic. But is it also in a bear market? Here’s what each term means, and whether the U.S. is now in a sustained period of lower economic growth and falling stock prices.