Expert: Recession? WHAT Recession?

Dave Ramsey: We're Not In One; No Need To Change Investment Strategies

(CBS)  All the gloom and doom in the media over the economy has lots of us scurrying to change what we've been doing on the investment front.

There are hitches, though, according to financial author and radio host Dave Ramsey: We're not IN a recession, and even if we were, that's often the best time to invest!

The basic bottom line, says Ramsey: Stay the course on your investment strategies, as long as they've proven successful!

On The Early Show Tuesday, as part of the "Recession-Proofing Your Life" series, Ramsey answered questions e-mailed in by viewers:

"WHAT ARE YOUR THOUGHTS ON A WORLDWIDE ECONOMIC COLLAPSE? IS IT JUST TALK?" asks John, from New York.

"I'm 47-years-old," Ramsey replied, "and every year in my memory, there's been some sort of talk like this ... but I've never seen it happen.

OK -- but how can we be so certain that the world's not going to fall apart this time around?

"The U.S has the most robust economy in the history of man, and it's the most sophisticated it's ever been; there are lots of checks and balances and safety nets," Ramsey explained.

He pointed out that, "The market dropped the same amount (relatively) when President Nixon resigned as it did during the Great Depression, but there were so many more safety nets in place in the 1970s that the drop didn't have the same effect. The markets dropped 511 points in minutes when the markets opened after 9/11, but there still was no crash or meltdown.

"By definition we are not in a recession," Ramsey said forcefully. "We have not even had one month of recession; we've had SLOW GROWTH. The economy was growing at (an annual rate of) 3.5 percent; now, it's at 1.5 percent, which is a big impact, but it's still growth. In order to be in a recession we must RECEDE: The official definition of an economic recession is an economy that has negative growth, that shrinks, for six consecutive months or more."

[prairiefox1]

BULL!

[griffinsivy]

Just my 2 cents on the gov''t checks and helping the economy. As I think this through, it seems that the checks most US citizens will get, will be just enough to pay a few bills and 1 trip to the grocery store. I''m not sure how this will stimulate the economy. I think maybe the govt needs to address what started the bulk of this decline - the mortgage industry, credit card companies and interest rates. I used to work in the mort industry. I know the risky loans the mort companies would do, knowing if the rates went up, buyers would default. They made loans to foreign nationals, not questioning where they really lived and what their income came from. The credit card companies did the same thing, only homes aren''t lost, debts were not collected, which is passed to the consumer, never able to get ahead.
Perhaps the govt could mandatorily make business drop their interest rates for one year. This will free up cash in for most people. Plus work out some type of program where homebuyers who now have delinguentcies on their mortg due to their rising rates, will be able to refinanced. This would encourage people to spend as they would have extra money at the end of the month. They will have hope which always boosts spending- consumer confidence. Maybe this will spur thought in others for a better long term solution.
K Louviere-Dutkiewicz
Texas

[ianlou]

"Expert: Recession? WHAT Recession?"

Visit Michigan and find out!

[olebd]

I''m so tired of this "expert". He lost me when I heard him advise everyone to pay cash for everything, including ones home and car. I don''t know anyone in this day and age who could pull that off unless they would hit the lottery or inherit a large sum of cash.

[otionwaves]

'' ..

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it takes about 5 months to hike and bus all the way around the carribean

.. ''

[b-easy63]

Just tuned in to get a good look at the financial "guru" claiming no recession. Always good to see what the latest "big, fat, liar" looks like these days. lmao

[b-easy63]

"No," Ramsey said. "Bonds aren''t necessarily safe, particularly when the Fed is pushing rates down. Bonds under-performed stocks for 70 years. Don''t try to time the market, pulling in and out of ''safe'' investments. Lots of statistics prove that if you invest steadily, you''ll win in the end."


Actually, that is not true: the truth is: "If some of us invest in the right stocks steadily, they will win in the end, if you invest in the wrong stock--you can lose everything you have. I took a class where the example of what a person would have had if they had invested in certain stocks in 1929 and after-- We were given copies of 1929 stock market and today''s market to track the companies and growth. MOST IMPRESSIVE!!!

BUT then I asked these 3 questions

1. In looking at some of the stocks that no longer were in today''s paper, I asked what happened to the people who invested in the wrong companies--THEY LOST EVERYTHING

2. I then asked how many of the companies that existed in 1929 are still here--about 13%. So 87% went belly up?

3. Last question, about what % of people in the market lost everything or almost everything? 87%.

It is a *** shoot--those who think they will win WANT the rest to keep playing to make THEIR pot bigger.

[monkeyman1140]

Only idiots play the stock market, especially now. Its the stock market insiders that want the idiots to put their 401K''s in, so they can steal their money.
Stick to bank certificates of deposit and other fixed interest investments, the bank will love you for it because they really really need the capital right now!