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The Ant and the Grasshopper
Written by Steve | Published: |
When I was a kid one of the cartoons I enjoyed was a short film depicting one of Aesop’s Fables called, “The Ant and the Grasshopper.”
The basics of the story is that the ants were very industrious and had great instincts to store up food for the winter.
While all the ants were working the grasshopper wasn’t concerned because the sun was out and it was warm. He would play his flute and just have fun.
Once the first blizzard of winter came, the grasshopper had no place to stay and couldn’t find food very easily, while the ants enjoyed their warm shelter with all their fruit and grain and were singing and having fun.
The grasshopper realized how foolish he was and the next summer worked with the ants to prepare for the next upcoming winter.
One of the nice things about the seasons is we know what comes next i.e. spring, summer, fall, winter…repeat.
With financial situations although there are patterns it’s not as clear cut and you have to look at a myriad of indicators.
We do know that outside forces do affect the markets and our hard earned money.
Right now there is a lot of uncertainty and the markets hate uncertainty:
Will a larger scale war break out now that the US military has now been stretched across three fronts… Ukraine, Middle East, and the Asian Pacific?
What will this coming election year bring?
Will the Fed have to continue to hold rates, take them higher or ease off a bit with the sticky inflation numbers?
Etc. Etc. Etc.
This is why I don’t recommend that you keep 100% of your assets in speculative assets i.e. stocks/bonds/mutual funds/ETF/Gold/Silver/Real Estate/Crypto etc.
You need to create some certainty with some assets that grow based on actuarial and scientific formulas.
You may not get the casino-like rush from these assets but if executed properly you will always be prepared for winter. The fun part is finding the perfect balance between the asset groups for your wants and needs.
So make sure you are working like the ants right now…there is a lot up in the air.