Dave Ramsey: The Stock Market Will Rebound

by Dave Ramsey
www.daveramsey.com

History proves we’re going to make it through this recession.

Bear markets—when stock prices decline by 20% or more over at least two consecutive months—are no fun, but they have historically set up the market to bounce back and surpass its previous highs. And it might happen sooner than you think it will. Just look at the past bear markets the stock market has overcome.

What you see below is a graph of past bear markets and how they affected the S&P 500. The graph shows, on average, how long a bear market lasted and how much the stocks improved after it ended.



As you can see, the average bear market lasted around 13 months. Even more revealing is that, on average, the S&P 500 recovered all of its value and more within one to two years after the bear market ended.

If you cashed out your investments during one of those bear markets, you would have missed out on about a 50% gain. That’s a lot of money!

So what does history teach us?
1. Don’t cash out your investments during a bear market. If you do, you may lock in the losses and miss the rebound of the stock market.


2. Never give up hope. This recession and the bear market will end. You and your investments will be stronger in the long run.

Thune: Use TARP repayments to reduce national debt

The Daily Republic
Published Wednesday, April 22, 2009

U.S. Sen. John Thune, R-S.D., introduced legislation today that would require the secretary of the treasury to use taxpayer funds returned by financial institutions under the $700 billion Troubled Assets Relief Program (TARP) to reduce the national debt, according to a news release from Thune's office.

From the release:

"Several financial institutions that received TARP funding have returned or expressed an interest in returning billions in taxpayer funding.

“'Congress is responsible for allocating taxpayer dollars and this legislation will prevent the Obama Administration from attempting to turn this money into a revolving slush fund,' said Thune. 'TARP was designed for the President to report back to Congress and seek approval for additional funding. This legislation ensures the returned funds are not reallocated by the administration for other priorities. Instead, this bill would work to reduce the size of the national debt in this country, something that seems to be a forgotten idea with the current Democrat leadership.'

"Recently, Secretary of the Treasury Timothy Geithner has indicated that he intends to spend these funds on additional TARP activities without Congressional approval."