While the world changes around us, human nature remains the same.
Unusual events lead to fear and uncertainty. But that fear and uncertainty also leads to predictable outcomes.
In the week after the 9/11 terrorist attacks, investors sold $1.4 trillion worth of stocks. A lot of consumers stopped flying. Airline traffic dropped by over 30%. People just stopped spending like before. And cash savings hit record levels.
That’s human nature. In times of uncertainty, we hunker down and prepare for the worst.
One of the ways this preparation manifests itself is through savings. In other words, cash on the sidelines.
Time and time again we have seen cash build up during uncertain times. In fact, we’re living in one of those times again.
The question is, where is it going? And can we profit? I’ll tell you below.