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The weekend party conversation filled itself with the speech of the Armageddon. More than one person told me in no uncertain terms that the world was coming to an end. My answer to friends, clients and family includes three facts. One, we’ve been here before. Two, great American companies still sell stuff to people. Three, cash cannot stay cash for long. Let me explain.

First, we’ve seen this all before and the world is still here. Calm down. In fact, in my experience as an investment advisor two important dates remind me to stay cool. In October 1987 I sat in my office wondering if the world was falling off a cliff. The market fell 22% in one day. This would be today’s equivalent of a one day drop of 2300 points! But, exactly one year later on Oct. 19, 1988 the market was up 23%!

More recently, also in October, but this time in 2002, the market again hit a bottom of 7286 on the Dow. One year later in October 2003? The market had rebounded and was up 33% to 9680 on the Dow! We’ve been here before. The market goes up. The market goes down. That’s why they call it a business cycle. This too shall pass.

Second, great American companies sell stuff. This is the great under-appreciated economic fact that rules the world. People buy stuff. Lots of stuff. In fact, relentless desire may be the guiding principle of all human beings. Further, they buy it all over the world. It’s true that various sectors, like the current financial sector, may suffer unique and stunning losses, but that doesn’t mean that every company in America comes to a screeching halt. Think of all the Head & Shoulders, Charmin, Pringles and Duracell batteries Proctor & Gamble sells around the world in a given day. The numbers are staggering at $83 billion per year. Not to mention the continued increase in cell phones of Verizon Wireless, or the Band-Aids, Motrin, Listerine and stuff we can’t even pronounce of Johnson & Johnson, to name just a few.

So, not only have we been here before, not only do great American companies get up in the morning, turn on the lights and sell lots of stuff to lots of people, but finally, cash cannot stay as cash for long.

Trillions are now sitting on the sidelines in cash afraid of the market. The simple problem? Cash provides no returns. Real returns are the returns after you pay taxes and account for inflation. Unless your investments make enough to at least account for taxes and inflation, you are losing money! The current Treasury returns of 2-3%, depending on the length of maturity, fail this simple test. The 2-3% Treasury return is taxed first, then eaten away by whatever current inflation percentage you think is real. Is a 3% inflation assumption fair in this environment? Cash after taxes and inflation becomes a negative number! Ouch. So, cash cannot stay cash for long and when it returns to this market, and it will, the market will rebound dramatically.

Be of good cheer. All is not lost. Instead, this market is presenting a once in a generation opportunity. Would you have bought stocks during the Depression? If you did you became fabulously wealthy. Why? You knew that we had been there before. You knew that great American companies sell stuff to lots of people who continue to want to buy stuff. You knew that cash can never stay cash for long since it is ultimately lost to taxes and inflation.

The world has not ended. Keep your chin up.

For further information concerning retirement please read Steve Meidahl’s highly regarded book, “Lessons Of A Real Life Investment Advisor” or visit Stephen O Meidahl’s website at http://www.smeidahl.com