Two summers ago, we spent a week on a beautiful lake called Sand Hollow. This lake has huge sandy beaches, crystal clear water, warm temperatures, and stunning views. I was really excited to do alot of water skiing, but I knew that windy weather could play havoc with my plans. In order to hedge our bets, I brought along a catamaran sailboat. Sailing is great fun, but if the wind won't blow, sitting on a sailboat is beyond boredom. Having both the skiboat and the sailboat turned out to be the perfect combination; because when the weather was calm, we ski'd the glass, and when the weather was windy, we had a blast with the sailboat.
On the third day, a storm came in like a hurricane. Boaters fled for the marina and scrambled to get out of the lake. As they all came racing in, disappointed that their day was done, we were heading the opposite direction in the sailboat with grins on our faces. We were ecstatic for these ideal conditions to set a sailboat speed record.
Financial planners recommend that you build some inverse correlation into your portfolio. In other words, pick assets with opposite tendencies. When stocks are up, bonds are typically down, and vice versa. This provides stability and security to your investments.
Businesses can profit from the same idea. When I got into estate planning with my dad, he said that when the economy is strong, clients will want to do tax planning, and when the economy is weak, clients will want to do asset protection. These two services have inverse correlation, providing consistent cash flow to an estate planning attorney.
Similarly, the golf course across the street from my office runs a ski and snowboard shop in the winter. The golf business and the ski business have inverse busy seasons, providing the owners with consistent income.
So whether you are planning a party, a vacation, an investment portfolio, or a business, I recommend that you consider some inverse correlation, and let the good times roll.