The S&P/ASX 200 Index (ASX: XJO) is down 3.5%. It's been a while since the market has fallen this heavily in a single day. It's time to get your investment cash ready in-case this is the start of another big market drop.
The market suddenly seems a lot less optimistic today after the number of Americans who have (successfully) applied for unemployment benefits passed 30 million people. The growth is slowing, but the total is still growing by millions of people a week.
No-one can know what's going to happen next with the share market. But I can't imagine many people's optimistic version of their estimates for the world's largest economy included the number of infections and unemployed continuing to rise at a stubbornly fast pace in the US.
Time to get your investment cash ready
It's true there is unprecedented government and central bank support for markets right now. I'm not sure we're going to see the ASX 200 fall by over 50% at any point during this.
But what's clear is that there is still a lot of investor uncertainty and fear around. Will the ASX 200 drop back under 5,000 points? We need to be mentally and financially prepared for the potential that it might.
Accept that volatility might be back. Understand that the share market is made up of different buyers and sellers each day with different thoughts on the situation.
You don't have to do anything with your current shares. The only thing that's changing is the price that someone else is willing to pay for your ownership of your businesses.
But you can decide to buy shares at these cheaper prices. The biggest factor that will decide your investment returns is the purchase price. The lower the better. These lower share prices aren't going to hang around forever. Investors will be quick to start buying when the worst seems to be over.
If shares prices drop lower next week then I'll be putting some investment cash to work.
