The Financial Implications of COVID-19

April 29, 2020

With the world gripped by fear as COVID-19 wreaks havoc on our lives and the economy, investors are particularly anxious and wondering what to do. With the added element of concern for the health and safety of ourselves and our loved ones, this emotionally-charged situation makes financial decisions even trickier. In this inspiring episode, Apollo Lupescu, PhD and Vice President at Dimensional Fund Advisors, looks back on previous historic financial crises and how they offer hope as we move through uncharted territory.

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Hello, and welcome to The Wealth Cast. I’m your host Charles Boinske. Today, I am fortunate to welcome my friend Apollo Lupescu, Vice President with Dimensional Fund Advisors, headquartered in Austin, Texas. Dimensional has 13 offices globally, and manages approximately $430 billion in assets. On today’s podcast, Apollo and I will discuss the impact of the COVID-19 crisis on the financial markets and offer perspectives from previous financial crises. Thank you for joining us.

Apollo, let me start by saying thank you so much for taking some time with us today to talk about the issues that we’re facing—investors are facing—in the marketplace, in the economy, personally, etc., and how we should be thinking about it from an investment standpoint. So welcome, it’s great to talk to you again. 

Chas, this is so great talking to you. We saw each other not too long ago, and I’m glad that we can do this podcast together.

Yeah, thank you. It’s a real privilege, having had the opportunity to do this with you. After having the opportunity to talk to you around the country at different venues over the years, it’s great to connect this way. So thank you very much. I know your time is under sort of high demand at this point, and I appreciate you taking the time to talk to me.

The pleasure is all mine. Thanks for having me.

Thank you. So let’s start out by talking about the general environment. You know, we’re in unprecedented times, clearly—investors are feeling stressed for two reasons: Obviously, the financial part that we’re going to spend time on today. But we have to acknowledge the other stress, which is worries about their health or the health of their family, their loved ones, their colleagues, etc. And as a result, it’s created a higher level of anxiety than certainly I’ve seen over my forty year career in financial markets and dealing with investors.

And I know that the cause this time is different than the bear markets that we’ve seen before. We’ve never seen a bear market caused by a pandemic, at least in my experience. But I wondered if, in your view, the fact that the cause is different this time should mean that we should be responding any differently from a financial economic perspective.

I think, Chas, you put it really well there. There are certain distinguishing factors about this crisis that we have never experienced. I have never been home with the kids for two weeks, and the cat and the dog and no school, all the restaurants closed, beaches closed, everything is shut down. It’s never happened in my lifetime, or my parents’ lifetime. So there are certain elements that as you put it, are creating more anxiety.

And on top of that, it really—the folks who are dealing with this in a health situation, it’s devastating to so many people and so many families. You have businesses who are shut down and employees who are not getting paid, and it is all around devastating, and it is unprecedented. I mean, I don’t think we need to sugarcoat it. We have never seen anything like this, and it’s absolutely important to acknowledge this.

And what we’re trying to see is whether or not, even though this is unprecedented, perhaps there are lessons that we can draw from the past. Because ultimately, the response to this crisis as an investor would have to be similar to what we’ve done in the past. It is a matter of controlling the cost of investing, maintaining discipline—which is probably the most important thing right now. Looking at taxes, all these things that have mattered in the past—do they still matter today? Absolutely, even as we have a different type of a crisis. 

And I think maybe Chas, if you don’t mind, it might be a good idea to spend maybe a little bit of time on what is different about this crisis, and maybe what is the same? What are some of the patterns that we’ve seen across different crises? Because as you said, this is not the first crisis we’ve had, and this is different. So we should start with the differences or the similarities?

Why don’t we start with the similarities and go to the differences?

Right. So, what I find is interesting is that this particular crisis is by caused by the Coronavirus. And if you think about it, this Coronavirus is unique. We’ve never seen a strain like this. We have never seen this exact type of a Coronavirus. And we’re looking at, this is dangerous. This is really unprecedented. And at the same time, can we look back at other coronaviruses that we might have seen in the past to draw some lessons and figure out maybe how to deal with this one?

And it’s the same here with the markets. We’ve never seen this crisis, and perhaps it is useful to look back and see what is it that is similar from other crises, and what is it that is different? So you know that I don’t want to draw cheap comparisons here, with “Oh we’ve seen this before.” We’ve never seen this before. And what I’m looking more for our times is situations where the headlines were similar. The world is different, we have never seen anything like this, it’s gonna be really hard to see how our rebound from this. And there have been times when we have seen these headlines.

This is not the first time that we see these exact headlines, with just the different context. Obviously, ‘08-’09 was one of those, when you had, you know, the headlines such as “The financial system is about to collapse.” And we cannot have an economy without the financial system. There were people being thrown out of their homes, economic activity was really down, unemployment was high. There were so many things about ‘08-’09, that felt desperate at the time as we were in the middle of the crisis. And that’s one of them, and it’s still fresh in people’s memories.

What I wanted to talk about is actually two others that have been really top of mind for me, because what I’ve tried to do for myself—I’m not young, but I’m not to the point where I remember things from the 70s. But I did want to bring up almost like a time machine, and if I can put myself in the time machine, and send me back to those periods, and see, how would I have felt as an investor?

I thought that it appears that I would want to go to, the first one would be 1973. Because in 1973, a few things happened that were remarkable. The first one was that up until that point, the world operated on a gold standard. We believed in dollars, because dollars were backed up by gold, and the government pledged that if you wanted to turn in your dollars, we will give you gold and we have enough gold to cover all the dollar bills. Well, in 1973, President Nixon basically said that the government no longer pledges to give you gold for your dollars, and it was no longer gold standard, but it was something called fiat money—that the money is good and exists because people believe it’s good.

And that was a huge change. Think of that mindset change. Because up until that point, I knew that the dollar bills are not just a piece of paper, they’re really backed up by precious metals. And now, that’s no longer the case. So inflation was high, you had wage controls, and price controls that the president put in place.

But the one that I really want to go to is, in the fall, there was a crisis in the Middle East. And to show their displeasure with the US policy, the Organization of Petroleum Exporting Countries, or OPEC, decided to put an oil embargo against the US. So we did not receive oil. And promptly enough, what you saw were huge lines, going for miles sometimes, at gas stations—no more gas. People were standing in these lines, and the economic impact was devastating. And again, in this time machine, put yourself in a car, waiting for hours to gas up, and you’re reading headlines, you know, “How can we possibly have an economy, because it’s reliant on oil, and we don’t have oil, it’s coming from countries that are not always friendly to us, so we’re doomed.  You know, we can’t see a way out of this, and it’s it’s a very dire situation, and it is unprecedented, that we’ve never had to deal with a situation where fuel has been a problem. And if you think about it, that must have been really terrifying. You know, being in that car for hours waiting to gas up, just to gas up and then go back home.

And if you fast forward 40 years that did change the country. It did change us. Because we became the largest oil producer in the world, and we went from the gas guzzlers of the 70s to much more fuel efficient cars. So in that respect, you know, perhaps there’s a crisis where we’ve seen these headlines, and there was a sense of desperation and panic. caused by a different trigger, but nevertheless, it was something that people felt it was unprecedented at the time.

The second time machine that I’d like to build, is to go back to 1936. And in 1936, you had the Olympics in Berlin, and Hitler presided over them. And it just became apparent the direction in which the world man about to go. And in 1937, the US stock market dropped by 35%, almost as much as it did in the great financial crisis. So a terrifying year. You lost a third of your money in the market. ‘38 was a quick rebound, but 1939 the war begins, and the market’s down again. 1940, it becomes clear that this is going to be a global war—Europe is invaded—once again, the market’s down. 41, it’s a negative year, and at the end, the US market, the US gets thrown into the war.

So if you’re an investor, and this time machine takes you into a living room with an old radio, just sitting there on a couch, and you think, “Well, the last four out of five years, I’ve lost my shirt in the market. Four out of five years, they were negative in the market. There can’t be anything good because we have cities being destroyed, we have millions of people dying. This is terrifying. We’ve never seen anything of this scale.” And as an investor you go, “So this has got to be scary. This is the last place I want to put my money in, the stock market. Look at what it’s done recently, and it certainly doesn’t look any better for the future.”

And what’s fascinating is that that even though historically, the market has returned, on average, about 9 to 10% per year, during the war years, the full war years 1942 to 1945, the US stock market did not return on average, 9 to 10%. What it did, it returned an average of over 20% per year, during the darkest days of our parents’ generation. And if you think about it, this is mind boggling after four out of the five years, as the war was beginning, the market goes down. And yet during those those really terrifying years, the market somehow jumps up to the point where  a dollar invested at the beginning of the war, you know, might as well have been doubled by the end of the war.

Right. Right.

And it kind of got me thinking that in both of these instances, it’s not that war is good for business. I think there’s a much more fundamental premise that has not changed, and you ask me what has not changed in all these crises? And in my opinion, what has not changed is the fact that we live in a society that is capitalist in nature. And in this way, of this economic system, free markets are absolutely crucial. And it is the free markets that have helped us prevail, because, you know, in World War II, if these companies could not sell cars, they probably made tanks. If they couldn’t sell toys, they might have made bullets for the war effort. In other words, these companies seek opportunity, and they will find a way to make money in whatever state of the world we’re in.


And I think that’s the fundamental premise that has not changed and is the same that it was the 1970s, and it’s exactly the same we see today. You have distilleries no longer making spirits, but they’re producing hand sanitizer, because that’s what sells, that’s what the demand is, that’s what people want. You have car companies repurposing assembly lines to make ventilators and and whatever is needed in the economy. And I think it is that fundamental premise, that in free markets, the markets are resilient because companies are resilient. And companies are resilient because I think all of us—mankind in general—is resilient. And that has not changed. And as long as that fundamental premise exists, there’s certainly a reason to be optimistic.

Yeah, I think that’s all true. I think all of the economic parts of the discussion are, you know, 100% correct. The hard part is, anytime you go through one of these crises, and, you know, I was a kid during the ‘73, ‘74 oil crisis, but anytime I’ve gone through them as a professional in my career, each one is really scary.


It would be hard to compare the levels of fear from one crisis to another, because they all have different reasons. But I think it’s fair to say that today’s crisis has that additional element of personal safety and health that makes it particularly acute.

But I think your point is clear: that doesn’t change the underlying economic principles. The underlying economic principles are still there. And we have to, as investors, do the best we can to reconcile the fear of the pandemic with the anxiety that comes from volatile markets. And try as best we can to separate those two things.

And you kind of hit it. I mean, that’s exactly right. You’re absolutely right. There’s not only the rational, analytical part to investing, but there’s the behavioral side to investing. And there’s a behavioral side to all of us. You mentioned fear. These are absolutely normal human emotions. And , there is a sense of fear. And you put it really well, that the sense of fear today is exacerbated by the fact that we have to deal with our own personal safety, and there’s no doubt about it.

I do believe that as investors, one of the big things that we all have to do is acknowledge the fear, and recognize that it’s normal as human beings to feel the way we do. There’s nothing wrong with feeling anxiety, concern, fear—whatever the word you want to use—or excitement, or greed, whatever the emotion you might be going through. There’s no doubt in my mind that this is absolutely a normal feeling, you know?

And Chas, what I think what you’re pointing out is that any investing in the market, really successful investors are able to disentangle emotions from investment decisions. In other words, pay attention to the emotions—don’t ignore them, because they’re real to you—on the other hand, don’t make investment decisions that are clouded with emotion, whether it is fear, or sometimes excitement or greed.

Yeah, I think that that’s the most difficult ingredient to a successful long term investment experience, right? That’s the hardest—you know, we can all look at the numbers, and we can all do the calculations, and we can all understand that an evidence-based approach to investing is likely to be superior to any other type. But when the rubber meets the road, and you have to separate your emotional feelings from the analytical part, it’s hard to do. And I think we need to acknowledge that’s the case.

It’s also acknowledging the role of the advisor, because financial advisors are absolutely crucial in this process. And it’s really—this is the time for you. And I’ve known you for a long time, and I remember talking to you after ‘08-’09, and all the clients that you helped at the time, manage these emotions in the stress of investing. 

But it is crucial for individuals to work with an advisor because when times are good, it feels like, “Hey, anybody can do this.” But it really, I can say that you you’re like a firefighter—you’re you’re a fireman for somebody’s wealth because it is in a time of crisis that you really get to see how much a good advisor like you shines and helps people through these difficult times. And I think without it, it is really hard. As much as people say, “Oh, I can deal with this, I can manage,” it is so hard. Because, you know, quite often people underestimate their ability to control emotions.

Yeah, and that’s just, that’s part of the human condition. And I would say the same thing. If I have a medical issue, it’s hard for me to disentangle that from, you know, the emotional part, from the medical science part of the equation. So, you know, I can understand how it would be difficult for someone looking at their finances to be able to disentangle those two things.

I wondered if the market fluctuations, as we’ve all experienced particularly sharp fluctuations in the last 30 days or so, if those fluctuations, the declines, should cause us to believe in any way that the markets are not functioning properly? Is there an issue in the functioning of the markets that is causing this, or is this more just a resetting of risk tolerances, etc.?

Yeah, and that is actually a very good question. Because you see other businesses not working. How about markets? Are they working, are they doing what they’re supposed to do? And I would say that the markets are actually functioning well. And I’ll give you the two main reasons that I think markets right now are really well functioning, and they’re doing exactly what I would expect them to do.

The market—and I know this is a big term that people use all the time, “market”—it’s taking a breather, it went for a run, it’s a living organism. Well “market” is basically a, you’re looking at about 3,000 companies in the US which have grown large enough to open up ownership to anybody in society. And these companies have a certain value. And their value is derived by the profits that they are expected to make. Because if you buy shares into a company, if you buy stock, you own a piece of that company. And as a part owner, you are entitled to part of the profits. So the value of a company is really derived from the profits they are expected to make for, you know, years and years and years down the road.

And what happens is that when you combine all these companies and don’t look at one of them by itself, but you look at them as a group—to get a sense of the whole market—then you get a certain idea of the value of the whole. And obviously, some companies might go up in value, some may go down, but the market as a whole is going to look across all of them. And when you see that the market goes up, all it’s basically saying is that the value of these companies is growing. And that is because these market participants expect that the profits would be higher than we thought before the news arrived.

Now, at the beginning of the year, there was a certain expectation about these profits and the range of the profits of these companies would make. As information came out, and as this Coronavirus unfolded, it became very apparent to everybody that the companies won’t make as much money—that the profits will be lower. And of course, if you see that the profits will be lower, and you won’t make as much money, the value is lower—I’m not going to pay as much to own a piece of it, because they won’t make as much money in profits.

So when you saw that, the market dropped. So the market drop is nothing to be surprised. It’s exactly what I would have expected, a drop, because these companies won’t make as much money, and therefore they’re not worth as much. I would have been shocked, by the way, if it hadn’t dropped. I would have been shocked if it stayed the same or went up, knowing that the profits will be lower. So in that respect the market did exactly what I thought he would do. Now, the fluctuations that we’ve seen lately, are also greater. And you know, I don’t know that anybody in the world would be able to give you a play-by-play explanation, why is it that you have big fluctuations, but intuitively, just intuitively, if you think of what I just just mentioned right now—with the fact that this is the first time that we had to deal with a pandemic, there’s no reference point from the past—it’s harder for market participants right now, to gauge, you know, what type of scenario would this be? Would this be a dark scenario where you might have a longer lasting, maybe more severe crisis? Or is it something that soon enough, we’ll go back to where we were before?

And because the range of these outcomes has, you know, has widened, and you now can either have a much darker scenario than in the past, or a much rosier scenario than in the past, that is, you know, certainly intuitively a reason why you might see these big fluctuations. That’s the first reason that I think that the markets will, you know, are working and functioning properly.

The second reason is that today, as always in the past, the markets are basically a way of looking at all the deals that are being made between buyers and sellers. Because for every buyer in the market, there has to be a seller. For every optimist, there has to be a pessimist, and the market’s trying to reflect the information and the opinions and the expectations of all of these folks. And nobody has a crystal ball to know exactly how this will play out, but everybody has opinions and expectations. And what the market’s doing is allowing these buyers and sellers with different opinions, to put all that information to work into this processing machine that ultimately comes up with a price.

So when that deal happens, when the buyer buys and the seller sells, the expectation probably for the seller is that the market will continue to drop, and that’s why they’re selling, and the buyers believing that the market will go up. Because otherwise, if they all thought they would go down, why would anybody buy at this price? So there’s almost like, perfect disagreement today in the market between buyers and sellers. Half the market participants believe that the market will go up, and those are the folks buying supposedly, and then half the market believes it’s going down. Those are the sellers.

So to me, that has not changed. It’s the same. You do have free markets where these folks are competing—and it is competitive. It is very, very competitive. And these are very sophisticated investors. So that hasn’t changed either. And that allows us to get information into these prices and to adjust continuously and incredibly fast to any new information.

Yeah, so there’s no reason in your opinion to think that the current price of the market—whatever it is today at this moment, and whatever market we are talking about—as long as investors are freely making transactions, there’s no reason to believe that those prices are wrong, per se. It’s more that they reflect the current thinking of the collective group of investors, and that will change as more information becomes available.

Exactly. Everybody has some information, everybody has some ideas, everybody has some opinions. And I think what’s beautiful about the market price, is that it puts all of these into a hopper, and together, it kind of blends them into—I wouldn’t say consensus—but it looks at, when you look at the combined wisdom of all these market participants, not any one opinion. That’s what you get in the market.

Now, just to be sure—these market prices will move, without a doubt. The reason they move is not because of something we know right now. The reason they move is because a minute from now there will be some information, there will be some expectation about the future that we did not know a minute ago, and/or a second ago, and then, that’s when the prices would reflect that. If it’s good news—if we find out there’s a new testing mechanism that takes ten minutes, and it can be widely deployed—my guess is that the market would react positively to that, because, again, at that point, we might be able to solve the crisis in a more efficient way. Whatever, this is just an example.

Yes. Understood. So. So is it rational to think that the heightened anxiety level that we’ve talked about already, is accentuating some of the volatility, because as information is processed, there’s less certainty, there’s less confidence that the information is correct, or that it’s being interpreted correctly? 

Yeah, the correctness of the information I think is one issue. I think that what you’re seeing is that there’s less clarity, less visibility. There’s certainly more uncertainty on the outcomes. So because this can go in so many different directions from here, the range of outcomes, of what can possibly happen—

—is broader.

Is broader. Exactly right. And that causes people to have valuations that are, you know, greater in nature, a wider range of valuations, that maybe at the beginning of the year, that wasn’t the case. Because even though there was disagreement, the range of these fluctuations of these valuations, perhaps it wasn’t as great as it is today.

Do you think In addition it’s fair to say in general, because of the factors that you just mentioned, people’s risk tolerances have declined? In other words, they’re less risk-tolerant, and as a result, the returns that they’re requiring from the same investments that they were making, you know, sixty days ago, are now higher, because their risk tolerance is lower—and that’s driven the prices of those investments down because expected returns in the future and price are inversely related, right? So is it fair to say that, looking forward, it’s reasonable to expect higher returns than average coming out of a crisis like this, much like we may have seen in the past? Is that still valid?

Yeah, I mean, the academic theory is certainly exactly in line with what you just mentioned, that the value of any company—the value of any financial asset for that matter—is derived from the future, cash flow, the future money that you’re expecting to receive as an investor. So if I expect to get, let’s say a dollar, for you know, for the rest of my life, and there’s not that much uncertainty around it, you discount the future dollars. You know, obviously a dollar from five years from now is not exactly the same as a dollar from today.

So there’s a certain discount rate, which is what is the investor’s expected return? It’s the flip side of the same coin. And what you see is that that right now, even for the same expected returns, because of the uncertainty, because perhaps of the risk tolerances that might be different. Right now, even though you might expect the same profit, the rate at which I discount it  is greater, so the price today is lower. So that the dollar from the future is not worth as much to me today, because there’s more uncertainty, and that means that exactly right what you said, that therefore the expected return has to be greater.

So that’s absolutely in line with the academic thinking and what we’ve seen in the past. It’s exactly what we see in the past. When things become less certain, that’s when you see the price drop, because there’s a higher discount rate, which is in effect, the investors’ expected return.

Yeah, that’s, and I think that’s an important concept because those investors that can do the basic blocking and tackling that I think we would agree needs to be done now, which is to stay disciplined, to rebalance when it’s appropriate, to manage the taxes where you can to keep your costs as low as possible—those investors that can do that are going to be in really good position to benefit from the improvement in markets when it happens. 

We don’t know when it’s going to happen though. But when it happens, you need to be there, because if you’re not there, you’re going to miss the opportunity. That opportunity is what separates successful investors over the long term from unsuccessful investors. It’s being there, and being ready when the opportunity presents itself.

You’re absolutely right, it is absolutely a staple of successful investors to look at periods like this as an opportunity, rather than panic. I mean, think of Warren Buffett—he keeps talking about, you know, investors should be fearful when others are greedy, and greedy when others are fearful, and this is exactly reflecting on the two things that you mentioned that I actually think that even though they’re intuitive, they’re so hard to implement without an advisor.

An advisor—absolutely crucial for two activities that if you don’t mind, I’ll kind of touch on them because they are so important. The first one is, you mentioned this idea of rebalancing. Rebalancing, fundamentally, is so counterintuitive to many people right now, because what rebalancing is saying is okay, your stocks have dropped, but your bonds, maybe they’ve gone up a little bit. And let’s say we’re just gonna look at two different asset classes in a portfolio—stocks and bonds. And if the bonds are going up, which typically tends to be the case, not all of them, but typically tends to be the case, and the stocks have dropped significantly, then what rebalancing is saying is that, go ahead and trim some of what went up, and then go buy the falling stocks.

And too many people are like, “What? The stock market has dropped, and you want me to buy more of it?” Well, that’s exactly what rebalancing calls for, is this idea that you want to sell high and buy low, which is a primary rule in investing. But the way you do it is not by deciding, in the moment, “Let me do this,” there has to be a predetermined program, a strategy that was decided on in advance, so you can get the emotions out of the way, and at a time like this, you just simply implement a system that was pre-set in advance. And that’s hugely important not to make these decisions on the fly, but have a process in place to begin with, and then very carefully for each individual, decide what is the right time to rebalance.

And I know Chas, that’s something that you mentioned, and I know, it’s a huge value proposition for advisors. Because to your point, when the markets rebound, if you have not done this, you are light on stocks—you’re underweight on stocks. And what it means is that you won’t be able to recover as fast. And it’s also true on the other side—if you have too much in stocks, then maybe the portfolio is too risky. So that’s the first thing.

The second thing that you mentioned that really resonated with me, was this idea of paying attention to taxes. But in times like this, what I know that you guys—and you should probably talk more than I do—is this idea that if something has dropped in value, and you have to pay attention, you gotta be very careful about this—there might be a way that if you sell at a loss, and you find something that might be somehow similar to invest in—when you did that, you realized a capital loss. And what it means is that on paper, for tax purposes, you have a loss. And the beauty of that is that when you do have gains to realize later, you can offset those gains with these losses, so the taxes of the future would be mitigated. So I think that’s a tremendous value add that you provide. 

Yeah, it’s part of the business as usual for us, and I think it is important. And I think it’s worth saying that, you know, every situation is different. That’s why we have an individualized approach to the advice that we give. But the job as I see it is for us to understand each individual’s situation and apply the principles in the way that makes the most sense for that individual.

Mmm hmm.

And not all investors are created equal in terms of their circumstances, so each situation needs to be customized to some degree. But the basic principles apply.


And what really is upsetting to me as a professional—and having done this for as long as I have—is to listen to news broadcasts, and CNBC or wherever it might be, where you have someone from an investment firm making recommendations about buying and selling different securities, and knowing that they have no idea of the—whether it makes sense for the individual listener. So I don’t want to make that same mistake here, and just want to emphasize that these things have to be customized, but I think it’s really important to make sure that you understand what the basic blocking and tackling strategies are in this environment, and be sure that they’re being applied as appropriate to your situation.

You know, it’s really hard from our perspective, as advisors, you know—we care about the people that we work with, and the clients that we work for. So we have the financial part to deal with, which is more cut and dry than the health issues that we’re helping clients talk through and deal with, and sort of the counseling that goes on, on both sides of that equation. This is a really important time to have a conversation, or at least understand clearly what it is that your options are—your choices are—as an investor at this point.

And I think as I look forward, I don’t think it’s a question of whether these things will recover. What I worry about more is, are investors going to be positioned well enough so that when things do recover, they can take advantage of that—they’ll be able to harvest the returns that are now made available? The positive returns. When those occur, you and I, I think would agree, I don’t know when that’s going to happen. It could be, it could start in May, it could start in September, it could be later, it could be earlier.Bbut because we don’t know that it’s important to maintain portfolio discipline, at all times.

Oh, absolutely. Absolutely. And I couldn’t agree more. You really have to start with a plan—understanding why exactly are you investing, what is the right balance in your assets between, you know, stocks and bonds. And, you know, listening to those blanket recommendations, [] how can you possibly make this suggestion, if you don’t know who that person is? If you have a retiree who basically depends on a fixed income, and they have no pension, you know, that’s a very different scenario than that 30-year-old who’s, you know, employed and making a decent wage. So you can’t have this one-size-fits-all, everybody’s different. Everybody has different circumstances, risk preferences. And I think you’re absolutely right, it does need to start with a plan and talking to an advisor.

Yeah. You know, from that perspective, we’ve covered a lot of ground in this conversation, and you’ve indulged me with a lot of your time, which I really appreciate. Is there anything else that you think we’ve missed in this conversation that you would want to emphasize before we sign off?

You know, I think it was great fun talking to you, I would say that, right now, it’s so much about putting things in perspective, and acknowledging the emotional side, and having somebody trustworthy to be able to talk to. And anytime I think that somebody feels a little anxious, feels a little concerned about what’s going on in the market, what’s going on with their own portfolio, my suggestion is go talk to an advisor. Because an advisor is a coach, and everybody—I mean, CEOs and big time athletes—they have a coach. And this is one of the roles of the advisors is to be a coach through times like this. I have no doubt—and this is becoming a cliché—we’ll prevail, we’ll get through this. You know, we will. Because as a society, I can’t imagine that, you know, everything will fundamentally change. This is a really tough time, there’s no doubt about it, and there will be uncertainty, hardship, and we’ll come out at the other end stronger than we were.

Yeah, that’s my belief as well. And in closing, I wish you the best and good health and do your family as well. I’m sure we’ll be talking again, Apollo. Thank you so much for taking some time with us today, and we’ll look forward to connecting with you the next time. 

Chas, it was my pleasure.

Thank you very much.

Thank you for joining Apollo and me as we discussed the financial implications of the COVID-19 crisis and provided some perspective based on past crises. The notes for today’s show can be found on our website, We look forward to bringing you more helpful perspectives and information on a variety of topics on future podcasts. Thank you very much.

About Apollo

Dr. Apollo Lupescu serves as Vice President at Dimensional Fund Advisors, whom he has been with for over 17 years. As part of the Dimensional Investment Strategies Group, Apollo worked directly with financial advisors in the Northeast area assisting in the development of their business, while managing the internal Client Services team, providing broad analytical support. He then oversaw the firm’s national advisor retirement business.

Apollo is now Dimensional’s “secretary of explaining stuff,” as alluded to by Chas in his introduction. In this role, Apollo frequently presents around the country and the world at financial advisor professional conferences and individual investor events.

Prior to joining Dimensional, Apollo ran his own consulting firm, which provided services to the US Department of State and the White House. His interest in finance and investments led him to teaching engagements at the University of California, Santa Barbara, where he’d earned his PhD in economics and finance in 2003.

Apollo earned his BA from Michigan State University, where he was involved with the water polo program both as a player and coach.


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