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$mart Money: One year later

I've run into a few pessimists lately, which is not unexpected, as there are always pessimists. If a guy is determined to be a pessimist, then all the facts and statistics in the world are not likely to change his mind.

I've run into a few pessimists lately, which is not unexpected, as there are always pessimists. If a guy is determined to be a pessimist, then all the facts and statistics in the world are not likely to change his mind.

Pessimists won't care too much for this column. They are going to gravitate to the articles that support their already entrenched perspectives.

Sometimes, though, people aren't necessarily dyed-in-the-wool pessimists as much as just simply people that are bombarded by pessimistic information, and they need a little light shone on the situation to help them see things a little better.

Let's start off with the Great Recession of 2008. That was the real deal, no doubt about it. A lot of people lost their jobs, a lot of companies went out of business, and a lot of investments went down in value. Some of these situations will turn out okay in the end, some won't. That's the way of the world.

Earlier today I was reading to my kids, and my three year-old daughter says "Diego sure is a good rescuer." For those who don't have kids, Diego is a cartoon character who rescues baby animals from danger. "He sure is," I say. "He's got a 100 percent success rate."

Well, in the real world there isn't always a Diego just around the corner with his rescue pack. Things don't always go the way that you want them to. Sometimes the coyote catches the cute baby gopher, that's just real life.

The thing about it is, if you were going to get smoked by the 2008 recession, you'd probably already know that by now.

Reading today's headlines, it's not surprising that some people think the Great Recession is still happening. Well, it's not. The Great Recession ended in 2009.

Meanwhile, though, here are some of the stories from just the past week...

"Unemployment Claims Jump to Highest in 6 Months"

"Dow Down; Foreclosures Up"

"Economic Recovery Weakening"

"Bernanke: Long Road Back to Economic Health"

"Recession was Deeper than Previously Thought"

There will be other headlines out there that will fit right in with this theme, but you get the idea. They make it sound like the wolf is at the door, like this current situation is something unprecedented, and the way out - if there even is one - is anyone's guess.

It's not surprising that some people are still under the impression that the worst is still to come, given the similarity that the headlines of today have with those of March 2009, when the markets happened to have been at their lowest. Back then people were reading...

"Berkshire Hathaway Suffers Worst Loss Ever"

"Wall Street Hits Another Dubious Milestone"

"Recession Tightens Grip Over US"

"Private Sector Lost Nearly 700,000 Jobs"

Of course, although it may seem like we are in uncharted waters, this Great Recession wasn't the first recession that we've seen. It wasn't the first bear market, either. It wasn't even the popping of the first investment bubble.

For the previous iteration of all those things you would have to go all the way back to...

Seven years ago.

Ya, that's right. The last time we saw ourselves in these unprecedented times of turmoil was 2003, the year that the USA invaded Iraq, an American teen was sued for illegally downloading music, and Mike Weir won the Masters.

The Dow Jones Industrial Average bottomed out on March 11, 2003, closing at 7,524. Some of the headlines of the day read...

"Stocks wrap up 3-year losing streak"

"Economy on edge of recession cliff"

"A stock recovery ... later than sooner"

"Consumer sentiment hits 9-year low"

"Wall Street still war wary"

One year later, in March of 2004, people were still reading bad news. News such as...

"Jobs Growth Remains Weak"

"Wall Street's Bulls Seen Losing Steam"

"Current Account Deficit Swells to Record"

But here's the thing - the reason for all of these glimpses into the past - in the year following the 2003 market bottom, despite this wall of worry, the Dow Jones Industrial Average climbed 34.61 per cent. The Dow, which bottomed out at 7,524 back in 2003, went on to touch 14,000 by October 2007.

We saw the same thing with this last recession too. One year after March 2009, when the markets bottomed, the Dow was up roughly 40 percent. If history is any guide, and really it is the only guide that we have, then it's time to take a closer look at what's going on here.

The pessimists will always have something to keep them preoccupied. Meanwhile, the recovery is happening. Sure, there is uncertainty. There is uncertainty with every recovery. There was uncertainty the first time that the Dow went from 7,524 to 14,000.

The question is, are you going to let that keep you from being there the second time it happens?

The opinions expressed are those of Brad Brain, CFP, R.F.P. CLU, CH.F.C., FCSI. Brad Brain is a Certified Financial Planner with Manulife Securities Incorporated, Member CIPF and with Manulife Securities Insurance Agency in Fort St John, BC. Brad Brain can be reached at brad.brain@manulifesecurities.ca or www.bradbrainfinancial.com.

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