Finally a level head appears. I need you in my corner when the Media starts chicken little segments.
What's damnable is that there's enough truth to make the exaggerations seem plausible. We all know that "Things aren't as bad as you think" doesn't sell as well as breathless, sweep week style gloom and doom. It's true, perhaps more so, for CNBC...I suspect viewership doubles if there's "news."
Life is not risk free; we assume risk by getting out of bed in the morning...or is it that we assume risk by staying in bed in the morning...?
Both. If we stay in bed, the house could be hit by a falling airplane, or burn to the ground. We'll lose our jobs, face foreclosure, and be homeless. Those who assume that a risk free existence exists are wrong...and those who believe the sky is falling will make bad choices. Those who believe the economy will grow to the sky without risk will make bad choices, too. Interestingly, they're both making the same mistake...which both would violently deny.
Having good liquidity is always a good thing, so I commend HS on that. It will either get you through the hard times, or provide ammo if you want to go big game hunting...distress sales on real estate, for example.
If you're convinced you know what's going to happen, then events won't change your mind...which can be a problem if reality doesn't cooperate. There are some who would rather be guided by a comprehensible but illogical financial fiction than a reality based but uncertain truth.
Many professional economists avoid this by using language that is incomprehensible, or by using their tried and true rule...when making a prediction, name an outcome or a date, but never both. Toddster knows that...
That's why those who predicted the next Great Depression since the 1970s (and there are a lot of bookwriters who made a fortune predicting it) aren't technically wrong...yet. I assume if we get one by 2030, they'll claim their timing was off...by 60 years? That's a work lifetime. Imagine having your entire adult financial life guided by the fear of depression. Imagine the bull markets and prosperity missed.