Big market falls like what happened in December feel like great security buying opportunities. And they are. In my backtests, the difference in performance was stark if you bought right before a crash or well into one (buying in 2007 vs. early 2009 for example).
But here's the catch: you have to be able to survive a bear market and hold your positions. I'm not referencing margin calls or panic induced selling.
No, I mean getting fired from your job and selling just to pay the bills. Recessions are high risk for employees. A recession will happen again, and unemployment will shoot upwards. Absent an MMT-style jobs guarantee, unemployment doesn't stay low forever:
I am unlikely to lose my job in the case of a recession, but that doesn't mean it's guaranteed that I won't. Therefore, one set of thoughts I'm balancing is my desire to buy all these cheap securities while questioning whether I have enough cash sitting around to deal with any unexpected surprises. Every working person will have to balance it for themselves and their own situation.
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