10 years on….In the spring of 2009 the country was still reeling from the impact of the 2008 financial crisis . Investors confidence was at an all-time low. It is well worth rereading what we said in print then and reflecting on what has happened since.
In 1930, real US gross domestic product (GDP) fell by 9pc -but the consensus forecast of 2009 real GDP is a fall of just 0.3pc.
While the financial news may seem unremittingly bleak, medium- to long-term investors should remember that the experts who predict gloom today did not see the current crisis coming – and may not see the recovery, either.
The other day I was in the opticians for my annual check-up and in walked a former next-door neighbour, a builder who retired a few years ago. He wondered if I had retired too and was surprised I was still at work.
He wondered why. I said I wanted to see out the stockmarket recovery, in which my investments would grow significantly over the next three years. He said it wasn't just my eyes that needed testing.
According to him, everybody knows we won't see a recovery of economies or stockmarkets in our lifetimes. Obviously he believes the experts who pump out the bad news that surround us right now. These are the same experts who last summer advised us property was a key investment for our retirement savings.
They're the same ones who confidently told us the US dollar would plummet. And who predicted gold, when it was at £1,000 an ounce, would double over the next 12 months. As oil hit over $145 a barrel, the same experts predicted it was heading to $200 and higher with continuing prices in hard and soft commodities.
Every one of these predictions ended up wide of the mark. History tells us that when all the experts are agreed, it's time to take a different view. It tells us to be afraid when things look too good and to be optimistic when things look too bad.
So given all the bad news it's time to look for reasons to be cheerful, and there are plenty. Successful investors buy when markets are oversold and sell when they are overbought.
They like fair value. Right now estimates here and in America suggest stockmarkets to be 42pc too cheap. Corporate insiders, who don't make many mistakes, are currently net buyers of their shares.
Private investor sentiment, too, is rarely misleading. Or should I say rarely right. You can measure this mathematically.
Ned Davis Research shows that, in the US, when private investors are at extremes of optimism or pessimism it's a perfect contrarian indicator for long-term investors. In other words, when the masses are overly pessimistic it's a good time to buy, and vice versa.
Experts tell us we're heading for the Great Depression of the 1930s again. Even US President Barack Obama agrees. He said: "By now it's clear to everyone we've inherited an economic crisis as deep and dire as any since the days of the Great Depression."
I'm afraid the numbers don't actually add up. In 1930, real US gross domestic product (GDP) fell by 9pc, the next year it fell 6.5pc, and in 1932 it fell 13pc. But in 2007 real US GDP rose by 2pc, and last year it rose 1.5pc. The consensus forecast of 2009 real GDP is a fall of 0.3pc.
Right now, monetary policy is loose, interest rates have been slammed down to almost zero and job losses and mortgage foreclosures are far less than they were in the Great Depression.
Always check the numbers. I read that, according to experts, unemployment in the US shows the worst job losses since December 1974 at 600,000. But what they don't tell you is that the US labour force today is 65pc larger than it was in December 1974.
They tell us advertising revenues are dropping. That's funny – because when you look at the online ad revenues in the US they're up 8pc year on year, with strong performance in the fourth quarter of last year. That doesn't quite go along with the Depression theory.
Levels of cash on the sidelines from experienced investors are also important. A US survey shows in January experienced investors had 42pc in deposit, a record level since records began in the 1980s. Incidentally, the last two occasions when deposits were almost as high – at 38pc in 1991 and 39pc in 2002 – were the previous two best occasions to have bought equities since late 1987.
Finally, studying US stockmarkets, after presidential inauguration days, going back all the way to 1900 is also encouraging. The average gain in the stock market following an incoming Democrat president, replacing an outgoing Republican, is 13pc 126 days later. Usually, the first month after inauguration shows weakness.
So there are plenty of reasons to be cheerful. Those prepared to take at least a two- or three-year view, hoping to have decent income and capital gains, could do a lot worse than tuck away a selection of good-quality UK equity and international income funds.
Alan Steel is the founder of independent financial adviser Alan Steel Asset Management.