I know we have all been through a rough time when it comes to the stock market. You don’t just shake off a collective $12.8T dollar wealth erosion without developing a few scars.To say that market sentiment was rattled might be the understatement of the year, or 70 years (the last time we’ve seen such a cataclysmic drop). But I say it is time to move on and believe that economic recovery is well underway.
The bearish pessimism that continues to flow out of the mouths of the pundits is starting to feel as irrational as the “trees grow to the sky” optimism that marked the beginning of the end of the last bull run. Many of the so-called financial experts (you know, the same people who helped guide your portfolio into the ditch) are calling for the “next leg down, the W shaped or jobless recovery, the looming crisis in commercial credit,” or whatever other bogeyman they can conjure up to keep us paranoid and paralyzed.
But the facts do not support their nattering negativity. They cite the fact the the Dow has risen over 50% since its March low. Impressive, yes. But to get back to it’s lofty high of October of 2007, it would need to rebound by over 200% from March. There is no shortage of runway left.
It is now widely expected that we will see positive GDP growth in the U.S. in Q3 when absolutely no one was calling for such in Q1. Such growth has already occurred in other parts of the world.
The daily headlines underscore this recovery. Today’s Wall Street Journal reported that GM, of all companies, is hiring back 2,400 employees in response to increased demand (not a “cash for clunkers” effect). The WSJ also quoted Paul Otellini, CEO of Intel, who talked about the “amazing resilience” of the PC industry. He predicted that 2009 sales would be flat to up. I assure you that none of the experts saw that one coming just a few short months ago.
So I encourage you to tune out the experts and dig into the facts about the recovery. Only after you truly understand the lay of the land can you chart the best course to your destination.