Financial Thunderstorms

​I just love a good thunderstorm. Last week we sat on our balcony and watched in awe as one moved across the valley, complete with pounding rain, high winds, lightning and hail. A few days later Launa and I found ourselves boarding a commercial flight from Dallas as storm clouds gathered overhead. The airline told us they were rushing to get out ahead of the storm but I reviewed my own aviation weather sites on my cell phone and told Launa weren’t going to make it.
Within minutes of pushing away from the gate, the rain started and the pilot announced we would not be able to take off until the storm passed. Thunderstorms have a huge amount of energy and no pilot, even in a large commercial jet, would intentionally fly into one. The pilot told us that rather than deplane everyone, he was going to taxi to the end of the runway and wait out the storm. Sitting on the taxiway, with several other jets, we had a front row window seat for the thunderstorm as it pounded the airport and lit up the skies.
Despite how dangerous a thunderstorm can be, they are also very short lived and so after just 45 minutes, the skies had cleared and we all took off for a very uneventful flight home. The pilot knew the storm made it unsafe to fly, but he also knew that it wouldn’t last long so there was no reason to cancel the flight.
In investing we have events similar to thunderstorms that we call recessions. Investors often fear recessions and obsess over when the next one will come. Many refuse to invest at all if they think there is potential for a recession. Such thinking would be like an airline cancelling flights if they thought there was a potential for a thunderstorm. In cities like Dallas in the summertime, you might as well close the airport since there is a potential for thunderstorms every day. Such a fear of thunderstorms would negate all the benefits flying can offer.
Likewise, the fear of these financial thunderstorms, or recessions, can negate the benefits of investing. Like thunderstorms, the potential for recessions always exists, but these very natural occurrences are relatively short lived. Just as an airline won’t cancel a full day of flights over a 45-minute thunderstorm, investors should not let fear of the occasional recession spoil their opportunity to invest. Seasoned investors, like seasoned pilots, just wait them out when they occur.
Thunderstorms and recessions come and go, but I don’t let either spoil my flying or my investing. I have learned to make the most of the more frequent good times and simply be patient for those few moments when the storms are passing through.