This past year was a tough one financially for almost everyone. The markets once again demonstrated that -- much like Mother Nature -- we cannot stand in their way. Once rolling, the markets cannot be deterred by government fiat or individual pleas, any more than we can muster the force to change the direction of a hurricane or tornado.
We can only find the safest shelter possible, hope the storm doesn't do too much damage, give thanks for emerging in good health and try to help others who were not so fortunate.
It's not easy to swallow our pride and what's left of our fortunes and admit to a greater force -- the market!
Some have lost much more than pride, including their homes, their jobs and their retirement accounts. Even worse, some have lost their health, and thus their ability to regroup and recoup. Or they've lost the one commodity more valuable than money -- precious time.
But you're still here -- and that's far better than the alternative. So don't look back. There is only one direction possible now: Forward. Let's leave 2008 behind with appreciation for the lessons it taught and resolution that we won't make the same mistakes in the future.
The U.S. Has Survived Worse
The past decades of relative prosperity have conditioned us to believe that all declines will be short-lived and that we can ride them out -- whether in our investments or in our careers.
But history also shows us that the prosperity of America has been significantly interrupted at various times in our history. Most notable was the Great Depression of the 1930s, with its legendary stock market crash, unemployment, bread lines and poverty.
That panic spread to the U.S., and when railroad financier Jay Cooke couldn't make good on his bonds, the U.S. stock market crashed, hundreds of banks closed over the next few years and unemployment rose to 25%.
An equally valuable lesson from these depressions, or financial panics, of the past two centuries, is that they could not deter America from rebounding and growing into another round of even greater prosperity.
Some may criticize this kind of investing as opportunistic, but those risk-takers paved the way for the next era of economic growth, which helped raise the standard of living for all Americans.
I have no crystal ball. My best educated guess for 2009 -- based on history -- is that the worst is not over yet. It's an old law of physics that when you get extremes in one direction, you can expect an opposite and equal reaction. And we certainly went to extremes in debt, leverage and speculation.