The Federal Reserve yesterday released statistics showing that for all of 2007, household net worth rose 3.4% to $57.7 trillion, the slowest growth in five years. After the effects of 4.1% inflation are included, real net worth fell for the year.

Despite these figures, I think we need to put things in perspective. After all, economic growth is cyclical and as such from time to time as the economy weakens, household net worth will decrease. It happened 5 years ago. It's not as if households lost 20-30% of their net worth. After factoring in inflation, the decrease was less than 1%. The US is still by far the wealthiest nation on earth and Americans have the highest standard of living of any people on earth. That's why there is an immigration problem. People from around the world will do whatever it takes to get to the US. So if their wealth drops minimally, I don't think it's such a big deal.

The pessimists can complain that things are bad and if you listen to them the economy will never recover.

Things have been bad before and they have always recovered.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no positions in any stock mentioned as of 3/07/08