Some interesting points to ponder…

Why “Bulls and Bears”?
I heard an economist mention how today’s monetary policy has become similar to an analogy of “Rabbits and Tortoises”. Instead of thinking of markets in a relative of up or down, it would seem prudent to think in terms of speed: faster and slower. This may b
e reflected simply as follows.

During Inflationary times (an expansion of the money supply and a sentiment a excess), money looses its intrinsic value and spending and investment become the norm. This pushes up both corporate earnings as well as stock prices – Stock Markets rise. When the spigot slows, due to either cyclical slowdown (due to over speculation) or an artificial tightening (through higher interest rates), this lowers the speed of both earnings (less pending due to financial constraint) and lower stock prices (lesser investment and increase in safer and less volatile alternatives).

Simply put, we are now experiencing the age of the Tortoise.

My Long Term Investment
Many investors are lost right now as to where they should park their money. For me the road remains unquestionably clear and I offer a bit of history to back it up. I think the following chart should sum up where investors should park their cash. Stocks represent fiscal assets, while gold represents physical assets.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: