Investing In The COVID-19 Era

Apr. 28, 2020 2:23 AM ETTR48 Comments
Investment Pancake profile picture
Investment Pancake
8.72K Followers

Summary

  • I'm a passive index fund investor - albeit one who (mostly) never buys index funds.
  • How do you know the difference between discipline and consistency, on the one hand, versus stubbornness and inflexibility, on the other hand?
  • How the COVID-19 era changes my investment approach.

I'm an index fund investor. I passively hold a reasonably static portfolio that's diversified across companies, industries and asset categories. It happens to be I who created the particular index that I invest in (which doesn't make it any less of a passive index fund than some of its better-known, commercially-available brethren). The only real difference that I can see between the Pancake Industrial Average and a fund like the Vanguard S&P 500 Index (VOO) is that unlike the latter, the Pancake Industrial Average was tailored specifically to suit me, my beliefs, and my investment values.

For the most part, I've found it easier to be a passive investor with an index that I both control and understand as opposed to an index that someone else created using criteria I don't know, understand or possibly even agree with. In life, there is much to be said for knowing exactly what you like... and making a point of going out to get it. The S&P 500 is packed with companies that I'd rather not own - companies burdened with gobs of debt, constricted by slender profit margins, dispensing inferior products or services, hounded by frustrated and irate customers, and that face competition akin to life on the African Savannah during the dry season. Uhhhh, no thanks. I built the Pancake Industrial Average to spare myself from all that and focus on only owning companies that I personally feel are likely to satisfy more or less the exact opposite set criteria. Most of the time, having my own personal set of index criteria buffers the urge to panic-sell when prices are dropping. And as with any long-term passive index, the Pancake Industrial Average is the financial equivalent of a roach motel: companies check in, but (mostly) never check out.

But with all

This article was written by

Investment Pancake profile picture
8.72K Followers
Individual value investor with strong penchant for dividend growth.  A former tax and estates attorney who retired in his early 40s and expatriated to Lisbon, Portugal with his family. Now writes about tax law, portfolio strategy and life in sunny Portugal.Association with SA author Evelyn TriasContributor, CNBC

Disclosure: I am/we are long TR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long every position in the attached charts, and have no other financial positions besides them. I am not an investment advisor, and nothing in this article is investment advice. Just because I own what I own doesn't mean you, your dog, or anyone else should. Nor can I certify the accuracy of any single thing contained in this article - particularly the calculations I made using the backtesting tool on Portfoliovisulalizer.com.

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