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| WallStDiary.com Market Analysis & Insight for the All Season Investor. |
- Even though the Dow & S&P 500 are making new highs in nominal terms, when
measured in real assets such as Gold (below left) or Oil (below right), the returns
look less optimistic. In fact, real "purchasing power" has declined.
Welcome back to WallStDiary.com. The goal of this website is to provide investors
with objective insight (bullish and bearish depending on the market environment) that
generates wealth as measured by gains in real purchasing power. Right now, the
website is more of a personal library. As for the market, it looks like we are in a
recession. Check out the weekly wrap and these charts. Thanks for visiting!
The Chart to the below left (from Chris Gilpin at Casey Research) shows that even
though energy and basic materials have had an excellent run, they are still not near
their recent historic average allocations in the S&P 500. Additionally, the chart below
right shows crude adjusted for real inflation is still cheap!
Inflation Statistical Update "Figures don't lie, but liars figure" Investors should be concerned with the increase in their "real purchasing power" and not merely nominal increases. Most investors do not realize the significant difference between real and nominal returns because the inflation statistics (CPI, etc) are understated (see below):
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Haines, Alaska
