Paulsen: Invest While Afraid

Wells Capital’s Jim Paulsen says that investors can feel free to worry about Europe’s debt crisis, but that it shouldn’t stop them from owning stocks. Paulsen tells Yahoo! Finance’s Breakout that the European fears are overshadowing a “pretty convincing reacceleration story in the U.S. economy.” He thinks that if Europe’s economy flat-lines, it would be a drag on the global economic recovery, but it wouldn’t be a “game-ender” for the U.S. and the rest of the world — much as when Japan, which was then the world’s second-largest economy, went into a depression in the early 1990s but didn’t drag the rest of the world down with it. In order for Europe to really bring down the rest of the world, there would have to be a “financial contagion that flies the pond” and hits the U.S. banking system — something Paulsen says is very remote with the U.S. banking system in its best financial shape in years.