Well, we’ve done it, folks! Despite COVID-19 and tens of millions of Americans unemployed, the NASDAQ successfully completed its V-shaped recovery and the S&P 500 isn’t too far behind.

In this post, I want to go through some key lessons from this most extraordinary and largely unexpected rebound. We are firmly back to bull markets, despite the economy still in ruins.

I’m not buying into this rally, but I continue to hold my pre-pandemic stock positions with wonderment and bewilderment.

As always, the goal is for all of us to become better investors in order to achieve financial freedom sooner, rather than later.

Despite not wanting to buy stocks after the S&P 500 has rebounded by over 30% since its March 2020 bottom, I still own a significant amount of stocks across a number of investment portfolios: two 529 plans, a SEP IRA, a Rollover IRA, a Solo 401(k) and a couple taxable investment accounts. Then there’s my wife’s SEP IRA, Rollover IRA, and two taxable investment accounts that own mostly stocks as well.

One would think that if I didn’t want to buy stocks after a rebound, I should also be willing to sell stocks that I already own. I do want to sell and I have sold plenty in my accounts in order to de-risk, but I’ve held off on selling stocks in most of my tax-advantageous accounts due to a variety of reasons I’ll talk about in this post.

To be clear, I’m not advocating buying after a huge rebound. I’m going to explain in 12 reasons why I haven’t gone to 100% cash or short-term Treasury bonds across all my portfolios. Everybody is at a different stage in their financial journey. Nobody knows for certain what the stock market will do, so please keep an open mind when reading. This post should help explain why so many people keep buying, despite all the destruction.

Starting on May 1, 2020, my main focus has been to get as smart and as financially prepared about real estate as possible.

In May, I have:

• Gotten preapproved for a mortgage to give myself more firepower to take advantage of any deals.

• Analyzed all the closing costs for buying a home with cash and with using a mortgage so I can make a truer offer.

• Gone through the process of understanding whether using a real estate attorney is worth it or not to cover my bases.

I believe the easy money in stocks has already been made after a 25%+ rebound. Therefore, I’ve moved on to focusing on new opportunities in real estate. I’m always trying to think ahead, not behind.

After publishing my real estate attorney post, I got this comment from a reader:

Hi Sam,

I really like your blog and appreciate your clear thinking, concise writing, and wealth of knowledge. However, I’m a bit disappointed that since March 18 you haven‘t been covering the stock market and I am missing your help on interpreting the irrational developments there.

The question of “Do I need a real estate attorney?” pales in comparison to “How on earth can the stock market rally in face of the greatest recession since 1929?” I would really appreciate your wisdom here.

Thanks Sam!

– Tom

My first thought was how selfish I was to write mostly about real estate in May. Given I own Financial Samurai, I should write more about what other people want, not only about what I want.

My second thought was how I failed to properly communicate my thoughts on the stock market during this time of crisis. After publishing How To Predict A Stock Market Bottom Like Nostradamus on March 18, Tom thinks I’ve been radio silent.

A good teacher is only as good as the student who needs the most help in his or her classroom. I believe in leaving no one behind during this time period. Therefore, I have let down Tom and others who feel the same way.

To make things right, let me share my crystal clear thoughts on the stock market after a huge rebound.