Yes, there are good reasons to be optimistic in 2009. As the legend goes, after the bombing of Pearl Harbor, a Japanese Admiral turned and said “We have awakened a sleeping giant”. The same thing happened in 2007. Many brokers, government agencies, bankers and more importantly individual investors were asleep at the wheel. During the years leading up to 2007, anyone could make easy money by simply investing in a mutual fund. It was so easy that making only 8% in a mutual fund seemed like a bad deal. Investors started requiring double digit returns for their investments. To meet these unreasonable expectations financial institutions created complex investments offerings that individual investors could not understand. In turn those investments lead many people to turning over their money to companies without doing any research. Sadly it appears that some of these companies did not understand these complex investments either. It was a case of the blind leading the blind.



In 2008, terms like bailout, housing crisis, Ponzi scheme, recession, financial bubble, and TARP where discussed on the local news almost every night. Before then the financial news had ten second spots right before a commercial or were isolated to business cable shows. This increase in exposure to money news will empower people to become more involved in their financial future. People have learned that making and keeping their money with investments takes work. 2009 will usher in a year where more people will do their homework and no longer simply trust companies or individuals with their money. This change in individual accountability for their portfolios and retirement accounts makes 2009 to be a good year to be optimistic.

Gladly in 2008 the unreasonable belief of unabated growth and wealth entitlement has taken a fatal hit. Of course it would be wonderful if stocks and real estate always increased in value but this is simply not possible. Today, the concept of home prices increasing has many people confused. These people bought their home because of the neighborhood or local schools. The drop in real estate value has caused their mortgage to temporarily be more then the value of the house. Some are panicking because they believe that their home should always appreciate. The truth is that the neighborhood or local schools are still great. Unless they need to move soon then their home should be a long term investment. Do their homework and refinance only when interest rates make sense.

These changes in thinking are making inroads into people's lives and that will be a good thing in the long run. Savings will increase and more people will invest in quality companies. They will no longer pay attention to get rich schemes on late night TV or financial message boards. In 1977, over thirty years ago, a song was released titled “The Grand Illusion”. It talked about the fact that blind ambition and keeping up with our neighbors is a marketing inspired fantasy. The lesson of 2008 is that living within your means, researching before you invest and not going into debt are the surest ways to keep or increase wealth in the future. These concepts may not be as exciting as “Make 20% The Easy Way”. We now know the truth about these claims and that makes 2009 a very optimistic year.