Bullish On Books

Published: Monday, 5 Oct 2009 | 10:30 AM ET

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CNBC.com

Americans are being hammered again by more bad news as the jobless rate inches ever closer to 10% - and some forecasters say it'll go as high as 15%.

The economist known 'affectionately' as "Dr. Doom" remains true to his name telling CNBC he sees "the unemployment rate rising through most of 2010."

Ugh.

But today, one author says - Enough is Enough! Terry Savage author and personal finance columnist says it's time to look forward - it's time to think positive by investing in America.

Enough of Doom and Gloom! by Terry Savage, author The New Savage Number: How Much Money Do You Really Need to Retire?

There’s a kind of masochism in “celebrating” the one-year anniversary of Wall Street’s collapse . Yet that’s what the media is busy doing this week – recounting the scary stories of Fannie

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[FRE  Loading...      ()   ], and Lehman, along with Congress’ rejection of the original $700 billion bank bailout, and the day the market lost a trillion dollars - September 29, 2008.

Funny what a little perspective does for you. Even $1 trillion seems cheap in hindsight! Why, that’s only half our federal budget deficit for this year. It’s only a drop in the bucket compared to the losses that came after that day, not only for stocks investors, but for real estate owners.

And we survived!

There’s a lesson in itself.

Not that we’d want to look over the brink again. The horror, the horror! With apologies to Joseph Conrad’s Heart of Darkness, now I know how Marlow felt as he peered into the abyss.

But we made it through. In fact, although hindsight is 20/20 it might be worth a look back – if only to impress upon ourselves the lessons we learned, or should have learned, from the incredible year we’ve been through.

The Dow is now down slightly over 10 percent from 52 weeks ago – but up nearly 50 percent from its 12-year closing low of 6547.06 on March 9, 2009. And it’s up just over 10 percent year to date.

The New Savage Number

If you were one of the people who “gave up” and sold stocks in the gloom of last winter, you may be feeling a little foolish these days.

But the real question is: What will you do during the next decline?

There will be another decline, of course.

But if you’re planning to retire in America, you’ll be much better off investing in America.

Remember, going back to 1926, there’s never been a 20-year period where you would have lost money in a diversified portfolio of large company stocks, with dividends reinvested. Even adjusted for inflation.

• Slideshow - 20 Stocks with the Potential to Pop

Sure the economy appears gloomy, with bankruptcies and foreclosures and unemployment all rising. But we’ve gotten through tough times before. It’s just that most people under 50 have no memory of the 1981-82 recession, when inflation was 13 percent, unemployment hit 12 percent, and the prime rate hit 21-1/2 percent!

Back then the DJIA was trading around 800 – and no one was predicting a technology boom that would take the Dow to nearly 15,000 in the next twenty years. If you sold out back then, in the midst of that steep recession, just think of the gains you would have missed.

So start planning, saving, and investing for retirement. No one ever got rich betting against America! And that’s The Savage Truth.

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Terry Savage

Terry Savage is the author of  The New Savage Number: How Much Money Do You Really Need to Retire? .Shis is also the nationally syndicated Chicago Sun-Times personal finance columnist.

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