⚡ What's a circuit breaker? ⚡

Hi friends,

Welcome to Better Have My Money, my Monday night newsletter about stocks, investing and feelings.

And damn, don’t we all have a lot of feelings right now! (wash your hands)

Monday was a panicky day. Plunging oil prices and the growing coronavirus outbreak sent US stocks plummeting.

The market dropped so low, so quickly, that it actually triggered stock market circuit breakers to pause the market temporarily for 15 minutes.

Confusing term of the week: “circuit breakers” — basically they are automatic mechanisms that kick in if the market drops too quickly in one day. So if the S&P drops 7% in a day — which happened today — all trading is halted for 15 minutes.

“They are designed to slow the effects of extreme price movement through coordinated trading halts across securities markets when severe price declines reach levels that may exhaust market liquidity,” explains the New York Stock Exchange site.

There are three levels of circuit breakers:

It was the first time one has been triggered since Oct. 27, 1997. By the end of the day Monday, the S&P 500 closed 7.6% down.

My office is also in self-quarantine, to help curb the spread of coronavirus in the city. Which meant I spent the most beautiful day of the year sitting on my couch in my ground floor apartment with little natural lighting, feeling vaguely tense.

Everything feels a little bit scary right now, even if you’re not a particularly anxious person.

Should I be outside frequenting local businesses, or should I be limiting my spending? And, should I try and stay home to limit how many people I come in contact with, in case I have coronavirus, since many people do not have affordable access to healthcare and there’s limited healthcare resources? Should I buy those cheap plane tickets to Europe and help support tourism, or is that just unhelpful at a time when Italy has just announced a quarantine on the whole country?

I’m trying to focus a bit more on community than myself — statistically as a person in my 30s with no underlying health problems, this virus should not greatly affect me if I get it. But how will it affect the economy and other workers, such as gig workers, hospitality workers, freelancers and those with no sick pay?

What about frontline emergency and healthcare workers? What stories aren’t being told because we’re focusing so much on the coronavirus? How can we keep as many people healthy and safe at once, and slow down the infection rate? (wash your hands).

What will the next six months to three years look like? (I’m not using the r-word yet, even if articles keep mentioning the possibility of one). The uncertainty of the coronavirus will continue to affect us and our finances.

When it comes to your own money right now, I feel like there are two sensible options. Either do nothing — don’t change your investment strategy or money, don’t check your 401(k), don’t open your investment accounts to see how they’re going, don’t read articles about the markets. Just know that based on historical records, the market will eventually go up again.

Or do just a little something.

Maybe it’s increase your 401(k) contribution by 1%, if you’re not maxing it out. Or bump up how much you automatically put into your savings account. Maybe it’s open a brokerage account, if you’ve never invested before. Maybe it’s purchase a few index funds, so you have some diverse investments across the market, rather than just individual company stocks.

Nothing dramatic. Just something small, to give you a tiny feeling of control back. Don’t suddenly sell things or drain your savings accounts and panic buy (either stocks or toilet paper), because everything remains uncertain.

Today I decided to transfer $1000 — I’d been keeping it aside to get some art framed and do a few fun house things, but I guess I will just keep living in shambles — to my Robinhood. I bought three stocks in a S&P 500 ETF, and a few in The Motley Fool 100 ETF, the 100 top recommended stocks by the site Motley Fool. These aren’t stocks that are super thrilling or exciting or align with my thoughts on ethical investing. But, they are diversified and historically reliable, at an uncertain time.

The Center for Disaster Philanthropy has launched a covid-19 fund, to help support the safety of responding healthcare workers, supporting those that have been quarantined and encouraging good strategies to help prevent the spread. (wash your hands)

And I think tomorrow I’m going to go work from a local cafe or a co-working space.

Hope your week gets brighter,

Amber Jamieson

Better Have My Money is on Twitter @bhavemymoney, so please tweet nice things (aka the link to our sign up page) and tag us. Got a mate who panic bought everything? Forward this onto them and tell them to subscribe.

And shameless referral code time! You can use my referral code to get a free stock when you sign up to Robinhood, which has free trading. If you open an account with Ellevest using this link, we both get $20. And sign up to Acorns here and we both get $5. As always, if you've got any questions about stocks, this is a shame free zone. Just reply and ask away.