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Sunday, April 1, 2012

CHART OF THE DAY: STOCKS PRICED IN GOLD: THE LAST 10 YEARS



Not a day goes by when some genius with their own TV or Radio program, like Rid Edelman, or Dave Ramsay, or some TV personality masquerading as a trader, like Jim Paulsen or Dan Dicker etc etc comes out to ridicule gold as a viable investment.  Even Warren Buffet, a man who sells stock for a living, is not shy about ridiculing gold.

Their argument is always that "over the long run" stocks outperform.

The chart above shows the last 10 years of stocks priced in gold.  It speaks for itself.

Now, I'm sure you can find 10 other years in the history of the world where stocks did outperform.  That exercise will tell you a lot about those particular 10 years.  If you have lots of time on your hands with nothing else to do, go research it.  You'll probably learn  a lot about 1955-1965, for example.

On the other hand, if you're more interested in how to invest in the current time period, the chart above that represents the current time period is probably more useful.

Look at the chart.  Ask yourself: what has caused this chart to look like it does?

Then ask yourself: What has changed?

Then you will know what to do.

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