Doom and gloom pervades. The World Bank warns of a world in crisis. The Motley Fool offers 4 tips for how you can turn pessimism into optimism.

Newspapers feed on pessimism. The public lap it up. In today’s tepid economic environment, it’s a self-fulfilling prophecy.

We’re talking ourselves into recession.

The front page of the Australian Financial Review is a joy to read…if you’re a pessimist.

“Optimism fades as Westpac (ASX: WBC) wields axe”

“I’m an optimist, but what is there to be optimistic about? Most people don’t feel this country is going anywhere at the moment. They’re not willing to invest in personal things or business” – Commonwealth Bank of Australia‘s (ASX: CBA) chief financial officer, David Craig

“Bank warns of a world in crisis”

“Falling prices threaten to curb BHP‘s (ASX: BHP) prospects”

“Productivity shrinks”

“Why I’ll have to work till I’m 70”

Happy Thursday.

Like David Craig, we too are optimists. But unlike him, we are want to spread messages of optimism. Together, by focusing on the positives, we can turn this great country around.

Here are my top 4 tips…

1) Stop listening to politicians. I stopped over a year ago. It’s liberating. No matter who is in charge of the country, your day to day life will largely be unchanged. And in any case, you have no influence over policy or direction. Say goodbye to self-interested politicians.

2) This is one of my favourite quotes…

“Worrying is like a rocking chair. It gives you something to do but it doesn’t get you anywhere.”

Give worrying the axe. And especially stop worrying about what bad things might happen in the future. Most predictions are wrong.

3) Think about how good we Australians have got it…

  • No recession for 20 years
  • More than 94 per cent employment
  • Low inflation
  • An ongoing mining boom, employing thousands of people and pumping billions into our economy
  • Term deposit rates of 5.5 per cent
  • A very strong Aussie dollar
  • House prices largely holding up
  • Ample room for interest rates to be cut
  • The average wealth level in Australia is almost $400,000, making us the second richest in the world, behind the Swiss.
  • We have a superannuation system that is the envy of most of the rest of the world.
  • A cricket team that may actually regain the Ashes

We just don’t know, or forget, how good we’ve got it.

By comparison, the U.S. economy, although rebounding, is a mess. Interest rates are zero, unemployment is close to 9 per cent, and outside the north-east, infrastructure is crumbling.

Britain is a basket-case. Unemployment rate has just risen to 8.4 per cent, the highest since January 1996. The pound is at its lowest level against the Aussie dollar for 27 years. If you’re going to the Olympics in July, you’ll be able to afford an extra pint or three.

Spain? Unemployment there is a staggering 23 per cent. Italy? Grounded and sinking, like its cruise liners.

You get the picture. We are truly the lucky country.

4) The Motley Fool is an investing site, so it would be remiss of us not to mention our cheap sharemarket.

Most investors look at the sharemarket through the rear view mirror. Looking back…

  • They see the S&P/ASX 200 index peaking at 6,750 in October, versus today’s level of 4,250.
  • For only the second time in 30 years, they see a sharemarket that has fallen the last 2 years in a row.
  • They see popular large cap stocks like BlueScope Steel (ASX: BSL), Billabong International (ASX: BBG), Paladin Energy (ASX: PDN) and Alumina (ASX: AWC) down more than 50 per cent over the past 12 months.

Yet for all that, the Australian economy is still growing at a relatively healthy rate of around 3 per cent.

As our Investment Analyst Dean Morel recently reminded Motley Fool Share Advisor subscribers…

“After two consecutive down years on the ASX, a third down year is highly unlikely. For some perspective, three consecutive down years has never happened on the ASX, and is an extremely rare event in any equity market.”

Over in the U.S, the land of optimism, their market is on the rise. Overnight, the VIX, otherwise known as the fear index, plunged 6 per cent to 21, close to its long-term average. Fear, it seems, is for Australians. We must be wimps.

Despite the World Bank’s crisis warning, the Dow Jones Industrial Average jumped close to 100 points. The Standard & Poor’s 500 Index has had its best start to a year since 1987.

On Bloomberg, John Carey of Pioneer Investments, said…

“People are realising that Europe is important, but it’s not the whole world. They are looking at the economic numbers in the U.S. and seeing that we’re not going back into a recession. The economy is still growing. We might be all right at the end of the day.”

Our shares are cheap. We have large companies trading on P/Es of 10 and dividend yields of 6 per cent.

We have Woolworths (ASX: WOW), a company with a strong competitive advantage and with decent growth prospects, trading on P/E of 14 and a dividend yield of close to 5 per cent.

When you consider the Reserve Bank of Australia cash rate is currently 4.25 per cent, and tipped to fall, possibly as low as 3.5 per cent in 2012, a near 5 per cent dividend yield is like looking a gift horse in the mouth.

Even better, we have fast-growing smaller and medium sized companies that offer compelling investment returns. These are the companies totally ignored by investment bankers, and totally forgotten by most investors. Our Top Stock For 2012 is one such company.

Another is IMF (Australia) Limited (ASX: IMF).

Another is Maverick Drilling and Exploration Limited (ASX: MAD).

Another is the mid-sized technology company Dean Morel made his very first recommendation for Share Advisor members. The company recently announced it was expecting first half profits to grow by up to 50 per cent, comfortably ahead of Dean’s expectations. Dean responded by upgrading this profitable and exciting technology company to a strong buy.

There are many reasons to be optimistic. We’ve touched on a few of them here.

We do also realise Australians are facing challenges. The cost of living is high, and rising. Unemployment is on the rise. Asset values are falling. Confidence is low. Politicians are dire.

But we urge you to don some rose-coloured glasses. It’s not that bad. At the end of the day, whatever happens in Europe and in Canberra, we will be alright.

You’ve just got to believe it.

Attention. For optimists only: We will shortly be opening Motley Fool Share Advisor to new members. If you like the idea of profiting from the gloom, and temporarily depressed share prices, click here to be added to our waiting list. There is absolutely no obligation to subscribe.

More reading:

ASX shares surge despite warnings of another market cataclysm

Disclosure: Of the companies mentioned above, Bruce Jackson has an interest in WBC, CBA, BHP, WOW and MAD. The Motley Fool has an optimistic disclosure policy.

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