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I'm getting tired of chicken little. The economic sky is falling! The economic sky is falling! We're all panicked for one reason - we're out of practice. It's been ages since the economy took a nosedive as part of the normal business cycle. Ladies and gentlemen, what goes up must come down. Same goes for the economy.
Now many people remember the economic hiccups from the dot.com bust and the traumatic effect of the Sept. 11, 2001, attacks. I am not dismissing those events. However, it appeared to me that the only ones hurt by the dot.com fiasco where those who held stocks only in that industry. They took their chances and paid the price.
After 9-11 everything stopped. As Americans we stopped bickering with each other. We reunited with long-lost family members. And we stopped spending money for a VERY short time. Then car companies came up with zero percent financing, others followed suit and the economic ball got rolling again.
This time, it's just a myriad of reasons, primarily the drag caused by the multibillion dollar war that is like the energizer bunny. It just keeps going and going. I won't get into that today.
Because many of us don't remember a pervasive economic downturn, we're freaking out.
Much like northerners facing their first hurricane season in the South. We're jumpy.
Just like a southerner driving in snow for the first time. Skittish. Well, skiddish.
So, we need to take a deep breath and relax. This, too, shall pass.
In the meantime, don't forget to enjoy today. Even if the downturn might smack you upside the head, there isn't much you can do to prevent it.
The serenity prayer people. To accept the things we cannot change.
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A little general destruction is usually ok for an economy. Look what happened to Japan after WWII - Germany, and even Britain, until they got the idea that socialism would work.
Hurricanes take money out of the insurance companies and spread it through the economy- that is a good thing. They put contractors to work, give con men and women their next mark, and reinvigorate neighborhoods. Eventually.
NOLA got hit hard, but then the city is under water - not just during the storm, but for real. THATS stupid. Let Savannah [and us] get popped by a storm strong enough to cover us with a little water - the difference is that it will drain away on its own. And then there is opportunity for people along with the destruction. What does not kill you, makes you stronger. Kind of.
I can't tell you how many times I explained it to teenagers and friends of my sons lately - whats the key to making money with anything? Most of them have heard about buy low and sell high.
The next question I ask it - 'when do you know that its time to buy low?"
And the lights go on - and some of them see the opportunity that this environment creates. Buy Low. Then sell high when it all comes back. Because, you know what? In 6-7 years we will be in the middle of another boom. And you'll look back at those stocks and real estate you bought now, and smile, like I have been at all the dividend paying companies I bought 2001-2003, paying me 8-9% on that invested money back then that even now, have doubled and tripled. You can't sell high if you don't buy low.
Exactly. The time to buy is NOW. It simply ain't gonna get much lower...if at all.
The only two real economic recessions I remember was the Great Depression beginning about 1929 and not ending until the start of World War II. My family lost our home because we couldn't pay the taxes, and we had to relocate to a city where there were more jobs - thank heaven for FDR during those times with the CCC camps and the start of Social Security. The only other recession that affected me was 1969 when my husband's salary dropped 50% and I had to return to work - steady work for me for 25 more years until I could finally retire.
You younger people haven't seen anything like our Great Depression! The economists have always been saying it couldn't happen again, but look around - the signs are clearly here.
Your clearly need to review the difference between recession and depression.