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Five Reasons To Be Optimistic If We Fall Into A Recession

By Erik Folgate

Yes, I saw the stock market this morning. It’s not looking good. There’s no reason to panic, though. We still have one of the most robust, dynamic economies in the world. The free market will correct itself, and it will bounce back. A couple of you have wrtitten comments showing your concern about the way your 401k or IRA has looked lately. For those of us that are young and we’ve never invested during a recession, it is scary for us. Believe me, it hurts every time I check out my retirement account. The total has been falling and falling and falling, and yeah, you get the picture. It’s happening to you too. But, never fear. I am going to convince you to stay optimistic even if the media talking heads and so-called economic experts are correct about this recession we’re going to slip into in 2008.

  • The best time to buy stock is when the market is down. Just like the housing market has turned into a buyer’s market, now the stock market is turning into a buyer’s market. Think about all of the cheap stock you will be buying every time your contribute to your retirement account. Buy low, sell high. It’s a winning formula. But in the case of your retirement account, you’ll be buying low and holding it for a very long time, so selling it when it’s high is inevitable.
  • Our economy operates in a free market. It’s not 100% free due to tons of necessary and unnecessary federal regulations, but for the most part, it’s a free economy. You should be encouraged that even when a free economy slips into recession, it always corrects itself. In fact, the fact that everyone is talking about recession is a good sign that the market may be correcting itself after the housing bubble debacle and the subprime mortgage crisis.
  • A recession might help lower the price of gas. Gas is already below $90 a barrel right after it was flirting with $100 a barrel. If we keep getting fed that the economy is doing bad, it will force some of us to scale down the use of gas and home heat, which could bring down the price of gas a little.
  • Unemployment is at 5% right now. This is a VERY low number. What this means is that the economy might slow down and your investments might not do much for a couple years, but at least you’ll have income! Neil Cavuto said yesterday, “Could you imagine what people would be saying if unemployment were at 8%? We’d probably be jumping out of window buildings, because it would mean that not only are we going to lose money in our investments, but we’re going to lose our jobs, too.
  • The fact that unemployment is at 5%, mortgage rates are staying low, and many companies are and will turn a profit in 2008, means that a so-called “recession” probably won’t last long. My opinion is that even if we do slip into a recession by definition, it won’t drag on for 2 or 3 years. We are the economic stability of the world. We were close for one day, and the rest of the world’s major economies tank, because they had a day to read our newspapers. No matter what people say about China, Japan, or Inda, we still hold the key to economic stability. We will rebound, and it will be sooner than later.

Don’t take this article the wrong way. I’m not encouraging a recession to be brought on. I’m just trying to shed some light on a subje’d ct that most people are preaching doom and gloom. The media wants to make you think that the Dark Lord has ascended from Hell for those ignorant to what a recession means to us.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • Nine Circles

    The only problem with the 5% unemployment rate is that it’s a bogus number. There’s always been some fudging going on with how this rate is calculated, but the Bush admin has bent over backwards to not count people who are unemployed, such as those who are unemployed for more than six months to a year. Those people just fall off the rolls, so we probably are a lot closer to 8% than anyone wants to admit.

    Oh and by the way, IMHO, Cavuto’s an idiot and a shill for the GOP.

  • http://www.scribblesheet.co.uk/article/am_i_going_to_loose_my_job Loose Job

    Nice one. I would encourage people to look for alternative income streams where, they can and prepare to batton down the hatches. If you don’t mind I wrote a little more advice here.

    http://www.scribblesheet.co.uk/article/am_i_going_to_loose_my_job

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