Words of wisdom for the "Doom & Gloomers"
The Advocate, Wednesday June 7, 1995
To the "Doom & Gloomers" of the World, we quote these words of wisdom:
"There are only two alternatives as to the future; we are going to have either chaos or recovery. The first assumption is foolish, because if chaos comes, nothing will maintain value; neither bonds nor stocks nor bank deposits nor gold will remain valuable. And since no policy can be based upon this impossible event, it must therefore be based on the theory of recovery."
"History tells us that this is not the first time we have had major economic problems, and it is possible that things could get worse. But just as surely as conditions righted themselves before - gradually readjusting to normal - so they will again. The only uncertainty is when ..."
"This is the time to use the dollar to buy good securities, whether greatly depreciated bonds or excessively deflated common stocks. All of you with money must some day put it to work, into some revenue producing investment. Why not invest now, when securities are cheap?"
"Some people say that they want to wait for the clearer view of the future. But, when the future is again clear, the present bargains will have vanished. In fact, does anyone think that today's prices will prevail once full confidence has been restored? Let's face it. These bargains exist only because of terror and distress. And when the future is assured, the dollar will have long since lost its present buying power. It takes courage, of course, to be optimistic about our country's future when nearly everyone is pessimistic. But it is cowardly to assume that the future of the United States, and let me add, Canada is in peril."
--- From a memo by Dean Witter, head of a leading investment house.
--- written in 1932
Not much seems to have changed since. What holds most people back is fear of the unknown. They feel pessimistic and want the return of their dollars to be guaranteed. What is so insidious, is inflation and how it deteriorates the purchasing power of those dollars.
December 31, 1967, $1.00 was worth only 20.43 cents in December 31, 1994. (i.e. $4.90 required to make a purchase similar to $1.00 in 1967)
Remember this Financial Tip for 1995. The Path to Financial Success: If you only walk on sunny days, you never reach your destination!
Money Matters Index