We live in a dry part of the Country where suffering gardens sometimes wait for months for a good soaking rain.
Even through extended drought periods, is there ever really doubt that the rains would come again? Isn’t it always just a matter of yes it will rain again, but I don’t know when?
Do you have a rainwater tank to store some of the rain when it comes?
Having a rainwater tank to catch excess rain when (not if) it rains, and then storing it for use for the periods in between the rains is a little bit like having enough cash saved in a bank account for your short term needs.
Just like the weather, investment markets go through droughts in between the rains when Share and Property prices falter and people feel a little uncertain about their future.
Not having enough safe secure cash to last through investment droughts inevitably leads to being forced to sell assets at low prices.
With careful preparation, investment droughts are periods where astute investors buy stressed assets at low prices from others who haven’t prepared for bad times and are forced to sell.
Gardens that rely on just rainfall to survive do not thrive compared to those that also receive a careful watering in between rain.
Investment portfolios, retirement savings, and family budgets do not survive if they are forced to sell good quality assets for low prices during investment droughts.
The key is to have enough cash to last through the drought periods.
Weather patterns change, and there will be more drought periods. But it will rain again.
Will you be ready?