Celebrities like financial guru Dave Ramsey don't make the downturn in the financial markets easier. They actually make it more dangerous for households.
Last month on NewsChannel 5, Ramsey told viewers that the stock market was still safe and advised they seek out growth mutual funds for investment. Then, the market was trading above 11,600 on the Dow Jones Industrial Average. Today, the Dow Jones Industrial Average fell to 8579.
If you took Ramsey's advice, you've now lost at least 26% of your investment.
Yes, the market will have a bounceback or two. But you won't make up your losses this year, or the next or perhaps 10 years or more. Investors who lost money in the 2001 downturn had yet to recoup their losses last fall, when the market traded at its highest above 14,000, reported The Wall Street Journal.
So if you don't need the original amount of money you invested until probably the year 2020, Ramsey's blanket advice didn't hurt you one bit.
If you were counting on the money beforehand, then daring Dave owes you an apology or a clarification on NewsChannel 5 of what he intended you to do.
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Dave has always said dont put money in the market unless you aren't going to touch it for at least 5 years, preferably 10 years. Why does he say this? Because 100% of 10 year periods in the stock market has made money and roughly 95% of the 5 year periods has made money. This makes the stock market a safe investment tool. Yes, it goes up and down. That's just part of it. Do you really think the Dow companies are really suffering right now? You think they are really worth what the stock price says? You really think they will go under? Nah, i think we'll all be alright. Just wait til the election is done with.
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