In mid-April, the Canadian government began releasing its Employment Insurance (EI) and Canada Emergency Response Benefit (CERB) numbers to the public.
In response to these numbers, a collective gasp was heard by financial markets which shook the confidence of many investors, myself included.
The staggering extent to which COVID-related shutdowns of small businesses have led to layoffs or under-employment is shocking, and is cause for concern for investors that have borrowed on margin or sought short-term investing strategies recently.
In the first week of launching these benefits, nearly six million Canadians applied for at least one of the programs - EI or CERB. To put this number into perspective, this amounts to approximately one quarter of all working-class Canadians, a truly shocking number.
I knew the numbers were going to come in high, but seeing a quarter of the workforce signing up for relief reminded me of the startling reality that so many of us are standing right on the precipice of disaster, with cracks in our economy only starting to be exposed now.
As with our investments, which, I continue to argue, should be centred around companies with solid balance sheets and enough cash on hand to wait out this crisis and emerge strong on the other side, as a collective, we must all take similar steps in our personal finance lives to shore up our own balance sheets, pay down high interest debt or refinance if possible, and raise cash to ride out the storm.
It’s undoubtedly going to be a bumpy ride, but cash will continue to be King, and having a buffer is going to be of the utmost importance for most, if one does not exist today.
Invest wisely, my friends.
