Today, we perform a "real wealth" check on the stock market. It's a little disappointing...As we mention from time to time, the seasoned investor computes his returns not in terms of dollars or euros, but in terms of "real wealth." And by real wealth, we mean gold.
Figuring gains in gold bypasses the misleading numbers you encounter because of inflation and currency dilution... It bypasses the "Boy, $50 doesn't cover what it used to" phenomenon and allows you to gauge returns by how much house, fuel, food, and vacation they'll buy you.
Performing this honest calculation is a downer this year: You see, the mainstream headlines will tell you that stocks – as measured by the S&P 500 – are up 18% this year. But gold is up 23% in the same time. So in terms of real wealth, stocks have actually decreased this year. Dollars are flooding the market, but they're worth less and less.
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