Inflation and higher interest rates not the topic "du jour".
Fact is, neither bankers or gold bugs or other such regular alarmist want (benefit) investors to have a direct ownerships of stocks. These advisers can't make money on that, as stock transactions are a brokers' turf -and commissions are now so very low. Stock transaction commissions around the world have fallen around 2/3 over the past 20 years.
Most such financial advisors are simply poor stock pickers -and they do not want their careers or reputation to stick out on a stock selection(s) gone down! So most rather put savers into high front-ended loaded commission insurance/annuity/mutual fund plans; this and then talk bad about the world, as its to their benefit! Its called the fear induced sales approach. Of course there have been periods where there was deviance, yet Gold and Silver have been an average long term investments, and the record shows it well. When it comes to performance, I for one have never been happy with averages.
Inflation in the past 20 years and likely in the near future is just not the topic du jour, consider:
--How much does an internet connection cost today vs. a few years ago. It better then ever now at lower cost -and same with flat screens.
--How much do long distance phone calls around the world cost, vs a few years ago. A bare fraction -and with Skype you can call for free.
Same with mobile phones, TV's, DVD players etc.. cameras and computers...even cars are made better today yet are cheaper then some years ago, inflation adjusted. Most also get far better gas mileage!
A good video player used to cost near $800-1000 US in the early/mid/late 1980, vs now not even $80-100 for a much superior far less bulky DVD player. So today most can watch a movie cheaper then 50 years ago!
-Also long and short distance Air travel, well down compared to 20-30-40 years ago.
-And at least in the US as in Spain, in many places homes are cheaper today then 10-15 years ago!
Today many baby boomers retirees (a huge global population group) can even beat the "high cost of living", in moving to places like Thailand or Costa Rica etc...where the cost of living is some 1/5 of that in USA/EU. So there is a way to beat inflation, even where it does exist and this option was not really available before the rise of the internet and cheap phones/calls.
Ah yes, lets not forget: stock transactions commission which have fallen around the world by around 2/3 over the past 20 years, or even more. This is a reason why people in the investment business just can’t make any money at that transaction business anymore. They so invent alternatives to the real thing. Yet, the real thing, often better over time, is diversified equity ownership in real growth companies which pay high dividends....these, overall, have been the true performance stars.
Inflation is and remains mostly low -and likely to stay that way for a while longer, same with local Thai and global interest rates. In such an enviroment few asset classes can beat low p/e, high growth stocks with dividend yields which tripple the local bank returns.
Best Regards,
Paul Renaud.
