Everyday I hear people running around state that “the sky is falling.” I politely smile instead of joining the pandemonium and keeping going my own way after I look up to see the sky exactly where it was yesterday. Recently some intellectuals and investors have developed the 3-second memory of a goldfish. Somehow these people have forgotten the economic history of America. America’s economy should not be defined by its world shattering success through history, which we have all become accustomed, but its ability to pull itself out of the ashes over and over again when it falls.
Reason 2: History is on America’s Side
Anyone remember the Great Depression followed immediately by WWII? How about the Cold War? I think that had a pretty expensive price tag associated with it. The worst-case scenario was “nuclear war” with the Soviet Union not including the financial costs to fund it. At one point America even had nukes parked in its backyard via Cuba. As well, what about the 1970’s Oil Embargo? Yes that definitely hurt the US economy. After that America had runaway inflation in the 1980’s, which didn’t feel great. How about the 9/11 attacks in 2001? America was going through the Tech Bubble crash in 2001 and all the sudden it was under attack by an unknown power. The list can go on and on but the end result is always the same when it comes to America’s economy……long-term growth. This slumbering giant of an economy so far has overcome every obstacle in the face of adversity. History clearly illustrates that America’s greatest economic power is its perseverance and that it will recover again.
There is absolutely nothing wrong with being bearish on the US or any economy at the right times. A perfect time to be bearish was at the height of the Tech Bubble or the peak of the real estate boom. Still, now is not the time to be bearish but opportunistic. History tells us that the greatest probability of investment success arrives when the US economy is getting beat up and or just starting to recover. I think it’s safe to say that arriving late to the “US recovery party” isn’t fashionable or profitable when looking back through time.
Take Away Point:
Some people make the US economy “sound” so bad that perhaps everyone should just start building their underground bunkers and turn into the “mole people.” Personally I prefer the sunlight and all this bearish talk is too little and too late. It’s the equivalent of some scientist running around saying an asteroid is going to hit the earth when everyone can already see the rock coming at him or her! Last, history has taught everyone that America’s economy for over 100 years has remained the most powerful force for a good reason and that doubting its ability to recovery is foolishness. This is reason two why now is the time to BUY the SPY. Stay tuned tomorrow for “SPY: 5 Reasons Why America is a BUY (Part 3)”
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