This week on the blog, Jonathan discusses the importance of choosing a fact over fear mindset to achieve abundance over scarcity.
Good afternoon. This is Jonathan Satovsky of Satovsky Asset Management. March 4th, 2020 with a video blog update.
And today we’re gonna start a topic called seeking wisdom, wealth and wellness.
And today’s topic is facts over fear.
So let’s talk a little bit about it.
You can see I’m travelling fearlessly.
And the airport is relatively quiet.
So this corona virus has approximately 3% death rate and it’s mainly older people over 60 with compromised immune systems.
By comparison, the common flu kills over 20,000 people per year at the U.S. versus 4,000 deaths globally for the current virus.
So the history of past viruses Zika, SARS, Ebola, saw minimal long-term effect on the economy.
One to two periods of economic slowdown.
One to two quarters and then it bounced back due to pent-up demand.
So the Federal Reserve cut interest rates 50 basis points yesterday because they probably realized when they look at the data that we’re living through recession as we speak.
People are not travelling. People are not spending. People are staying home. People are absolutely petrified.
So to prevent an out-of-control event, they took pre-emptive action.
Well, what does this have an impact on?
Well the 10-year Treasury is 1%, so you can, this is a fact, you can buy a 10 year Treasury bond and lock in 1% compounded rate over the next 10 years.
Or, you could buy U.S. buinesses. Yeild on the S&P 500 2% and the yield on non-U.S. stocks is 3.4 percent.
So you can buy businesses and wait it out.
Yes, you could live with more volatility but the potential exists with the Dow at 25,000. That I can, when I step back and I suppress my short-term fear and I look out on the horizon. I could see the potential for the Dow being worth 50,000, 100,000.
So, don’t I want to set myself up looking forward to give myself the potential to double or quadruple my resources and look at the world with abundance rather thatn scarcity that we’re all gonna die.
I’m not taking part in that and I’m travelling fearlessly and so should you.
Have a great day.