Why the Stock Market bubble of the century won’t crash like in 1929. But it will most probably trend lower. Mr. Inflation comes to school the boys on something we call “Real Earnings”. Warren Buffett always refers to real earning as the appreciation of a price after calculating the price of everything else (naturally).

According to a recent study the Dow has only appreciated in value by about 1.64% a year after infaltion. Now thats still pretty good. But we want to “buy low” and something tells me that where we are is not a low. When someone tells me that real estate and stocks are the worst place to have your 401(k), I will be speaking to my stock broker.

[Side Point: Markets follow one thing and one thing only – The sentiment of the people. There were those (few) that said in mid-July to buy stocks. They were absolutely right. Investors were scared to step into the market. But if you’re in it for the long run (which happen to show the best returns, I suggest we play it safe.]

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