A Trend That Is Largely Invisible To Investors
Our World Today Is Increasingly Relying On Financial Paper . .
. . . As We Define Our Total Wealth With Largely Paper Assets
Paper Assets Are Now The Greatest Portion Of Wealth In Over 90-Years
By George R. Harrison
I generally make a point of not following the crowd. Actually, I should rephrase that to read: My chart analysis seldom puts me on the same side of the market as the popular press. If ever there was a market 'rule' then 'not following the crowd' is certainly one that gets a lot of circulation. It's also one that almost everyone ignores. With all the press confusion, it's no wonder. You need the tools to make your own decisions.
It's good to be as fully aware of one's investing environment as possible and, with that in mind, we're taking a look today at an area of the investment arena that hardly comes up at all on people's radar screen.This article is about a very long-term trend but, this trend is not about prices but about the economy and personal investment habits. We're so immersed in this flow that we've never really thought much about it as the time periods over which the currents reverse are relatively long.
However, we're now approaching one of those current reversal times and it's a good time to take stock of where we are and where we've come from.
As shown on the chart above, we're reaching new highs when it comes to accumulating our assets in paper or Financial Asset form (like Stocks and Bonds) versus having our assets and wealth in Real Assets like Real Estate or Commodities.
Periods of inflation and deflation have had a good deal to do with this, but, also new generations of traders and investors who know of no other way in which to accumulate value for themselves.
Inflation raises the value of Real Assets (through higher Real Estate and Commodity prices) and so accounts for the big dip in paper assets on the chart around 1980 (the most recent peak of high interest rates and inflation).
Deflation increases the value of Financial (Stocks & Bonds) Assets. This was the big trend and worry during the Depression of the 1930's and we see the same rising effect on paper assets shown on the chart. And, there has been a big deflation in Commodities prices just like there was in the 1930's. But, it's good to remember that no trend lasts forever and the swing towards Paper Assets like Stocks and the Stock Market will eventually end and prove this point yet again. Note on the chart how we've been in a rising Financial (Paper) Asset environment now for almost 30-Years. That's a longer run than we see on this chart over it's 90-Year period.
This chart is a bit top-heavy in my opinion. Bonds can be made more attractive only by raising interest rates which will, in turn, tend to dampen the stock market. However, during war times, the US is still a refuge for lots of investment funds and Bonds are the way this is usually done. So, this will have to monitored carefully to see which way the wind blows (and how strongly).
It just makes sense that too many investors in too narrow a field of investment spells high risk. The better part of Wisdom is to diversify some assets into the REAL ASSETS field like Commodities (which are just starting to come to life again). The Financial or Paper Market for assets has a nasty habit of evaporating on stock market reversals. A lot of time is lost coming back from these set-backs.
We're already in record territory on the chart shown which is comparing the Stock Market S&P 500 to the CRB Commodities Index. This means that we have to be especially vigilant when monitoring our individual stock charts and the index charts. These are the times to make good use of the Unique Market Tools that are offered ONLY on this website. I've helped many students to learn these special trading methods (which were discovered over the last half-century) from all over the world. These open-minded students have learned and achieved much. Take some time to read just some of the Testimonials to get some idea for yourself.
Any of the Courses mentioned on this web page like the 'Stairway, Excalibur, The Exponential or Intraday Trading Secrets' will be a big assistance in tracking the big price trends as well as the intraday conditions and minor trends. Whichever time frame you're following; you'll need the best help you can get. Consider clicking on the 'Master Trading Courses' at the top of this page and use the drop down menu to find more information and testimonials about the special trading methods offered only here.
These are some of the methods that can be applied to intraday trading quite precisely (see the chart above for example). I'm offering it to you today.
I offer a special Collection price for these methods and three additional ones (contained within The 'Intraday Trading Secrets' Course), please send me an e-mail requesting additional details and pricing. - George