The economy isn’t in a recession, it’s in a depression, but that doesn’t mean investors should shy away from the markets. That is the sage advice of David Dreman, chairman of Dreman Value Management, writing in this week’s issue of Forbes.

“Let’s not sugarcoat what’s going on,” Dreman writes. “We are in a depression. It continues to devastate industry after industry like a wild forest fire leaping across the clearings.” By the end of this year, there could be 50 million people out of work around the world.

Nonetheless, all industrialized nations have risen to the fore with monetary and fiscal stimulus packages, and the geopolitical outlook is relatively stable, Dreman notes.

Certainly, in the short term, there could be far more volatility ahead, and stocks could decrease another 15% to 20%, he concedes. But for those with a long-term horizon, he believes large-cap value, real estate and low-cost exchange-traded funds are the sure way to go, since the value of all of these investments is at the lowest levels in decades.

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