Coronavirus, The Recession You've Been Waiting For

Millennials, the coronovirus, or COVID-19 is the full-blown recession that we've been waiting for. Many of us have been begrudged the last few years, because everything is so expensive from student loans, to stocks and homes, while wages are pretty similar to what they were 10 and 15 years ago. Some of the estimates of the impact of the coronavirus, COVID-19 are quite drastic, and we've seen the impact that many are expecting that to have on the economy. Combing an increase in sick days, with nearly stagnant travel, cancelled entertainment and business-related events, and social distancing, we're likely just in the beginning stages of COVID-19's impact on the economy.

No one can accurately time the market, but I believe that we will continue to see the economic impact of the coronavirus well into the summer months. I wouldn't be surprised if stock prices remain suppressed for a little while, and continue to trend downward a bit. I have no clue how the housing market will be impacted. On one hand, I feel like home prices will decrease, because there will be a general sense of insecurity, many people will probably be laid off in the service and hospitality industries, and people will likely still be avoiding large gatherings, like open houses, which could lead to less competition.

On the other hand, interest rates are at an all time low, there is a massive shortage of homes available, there is a huge cohort of millennials who've been waiting for a recession to hit the housing market are just waiting to pounce on a good deal. Which side will win out in the housing market? No one knows. I'm guessing that if the recession lasts longer than the summer of 2020, we'll see a more substantial impact. Many will feel insecure, or lose their jobs at higher rates, and home prices will come crashing down. Home prices are already a little over-inflated right now, because interest rates have been low for so long. If the coronavirus is handled before the end of the summer, I'm thinking the low interest rates and lack of supply will be enough to push the housing market a little higher still.

Regardless, there are great deals to be had in the stock market right now. No one can predict the bottom, or the reversal of the market. What we do know, is this isn't the peak, and the market has recovered from every recession before. Past performance doesn't guarantee future results, but I'm willing to bet the market will recover eventually. My plan in 2020 was to leverage more capital into the stock market anyway, and decrease my overall exposure to real estate. Now, I think I'm going to continue to invest in my company's employee stock purchase program, 3-4 high-dividend stocks, and possibly the DOW Jones, or S&P 500 until the market gets back to the February highs, or until I feel that I need to re-evaluate the strategy.

Overall, I think the market will continue to decline for a couple of months, but regardless I plan to slowly leverage my way into the stock market throughout the rest of 2020. I'm willing to bet my savings this is the spark of opportunity we've all been waiting for.