Highlights from the Dave Ramsey Show

Question: Listener on Twitter asks what it means to Americans when the stock market is closed. Dave says it doesn't mean anything more than it being closed on a Saturday.

Answer: Not much. The stock market, or New York Stock Exchange, was closed on Monday and Tuesday because of Hurricane Sandy. Wall Street is an actual street. Some people think it's a mythical place where stocks are traded, like Star Trek land or something. It's only a hop and a jump from Battery Park, near the south tip of Manhattan where a lot of the flooding has occurred and people have been hammered there.

To go down there and open the stock market today would have been crazy and dangerous. The NYSE didn't need to open and then have all the systems go down and then have them all on battery backup power in the middle of this thing.

But as far as what that means to you, it's very little. There may be a little bit of wildness when it reopens, but by this time next week, people will be a whole lot more worried about a presidential election than they will about a hurricane.

For that matter, what does it mean when they aren't open on Saturday? It means that on Monday, trading and exchanging of stocks for money will resume. I don't think you'll see anything earth-shaking about it.

It is very interesting, though, that for the first time in the history of the New York Stock Exchange, it has been closed for two days due to weather. The only time I remember it being closed in my adult life more than two days, or even one day, was 9/11. Again, Wall Street was right around the corner from where the towers fell. The front doors of the stock exchange literally had dust on them from the collapse of the towers.

It was closed until the following Monday if I remember right, and 9/11 was on a Tuesday.

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Question: DJ on Facebook is a college student and focusing on his future financial life. Is the down economy usual and just a part of life? Dave says that the economy does occur in cycles, and it is a part of life.

Answer: It is just a part of life. Good times do come again and there are always cycles in the economy. There are also times when it has been worse. You hear all the talk about how this is the worst recession since the Great Depression. No, it's not—1982 was worse.

We had double-digit inflation, double-digit unemployment and interest rates on homes were 17%. Thus, the Jimmy Carter era came to a close. Ronald Reagan was elected in that environment. It's been a long and kind of boring recession because it didn't really drop down and then come back.

It dropped down fast and was exciting and crazy and everybody thought the world was coming to an end. And it hasn't really rebounded; it's kind of just wallowed and crawled along. There's a lot of argument as to why that is—I think it's because the government has kept its finger in the dyke too long. They screw up everything.

But it's part of life. Times will be good and times will be bad in your life. That's why you need a financial philosophy that works in up times and down times. The stuff that we teach about being out of debt and investing conservatively works all the time.

Right now I'm really tempted to not invest conservatively. I'm tempted to invest like a wild man. I'm squeezing every dollar out of conservative I can squeeze to invest because everything is on sale. It's a great time to buy real estate. It is a great time to be investing in mutual funds. The best time was actually about a year or a year and a half ago.

Just keep investing and keep working your plan. If you think you just graduated at a bad time and you're never going to have a good life, that's just bull. That's someone walking around with a cloud over their head. There's always something good and there's always something bad out there. You can count on both.

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Question: Scott wants to know what makes Dave an expert on the economy. He thinks Dave would take a Herbert Hoover approach of doing nothing while the economy goes down, perhaps even into a depression. It's a question with an attitude, and Dave has some to match.

Dave Ramsey's advice: I would take that approach. And what makes me an expert on the economy is about the same thing that makes you an expert on the economy, smart aleck. The difference is that I've been walking around out here for about 40 years watching capitalism work. And by the way, if you do a history lesson, you'll find that it was World War II that pulled us out of the Great Depression, not Keynes-ian economics or the New Deal, you twit!

Go look at this stuff before you decide that socialism is the way to go, because it's not. Capitalism is the answer.

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