The Most Important Chart
If you understand this chart, you will understand more than 90% of investors out there. Currently, in the month of September, stocks have rallied for about four weeks. Of course, most people don’t realize that in terms of real value, stocks are not gaining value, but are losing value.
You’re probably used to looking at charts such as this one:
The above chart is the normal S&P chart that we’re used to looking at. It shows the performance since April of the S&P 500 index. It’s the wrong chart.
What’s the right chart? The right chart is the next one, that shows stock performance in relation to loss of purchasing power, or stocks priced in gold. Why is this a better chart? Because stocks can be manipulated by manipulating the dollar. If the Dow hits 100,000 but the dollar is worth less than a piece of toilet paper, what have we gained? Nothing.
Again, the next chart is the right chart. As you can tell it shows a different story. You must remember to look at this chart when talking about the stock market.