Can you believe – USA Dow Index has fallen by 54% since 1999?

 

10^th July 2021

Can you believe – USA Dow Index has fallen by 54% since 1999?

Dear Fellow Travelers,

Namaste! Thanks a ton for making our post on USA – super hit. People love the USA. If you want to take an idea of the World – then also you must read about the USA and keep yourself ready. Today we are taking another macro study focused on the Market. We will compare the Dow index with the Gold price.

Gold price is the most objective standard. Let us compare against Dow: -

Gold price was around USD 240 an ounce in September 1999. Dow industrial index was 10300 in September 1999. Now, with this, you could buy around 42 ounces of Gold in the USA in 1999.

Today Gold price is USD 1800 an ounce and Dow is at 35000. Today you can buy around 19 ounces of Gold. 

If you measured in terms of Gold – the Dow index is down by 54% compared to Gold Prices.

It means though the market appears to have moved up from 10300 to 35000, you can buy less than half the weight of the Gold.

Compare this with Bitcoin: -

In 2017 – you can buy 20 bitcoins with Dow Index. Today you can buy 1 bitcoin. So, in terms of Bitcoin – Down has gone down by 95%.

How is Indian Scenario?

Gold was around Rs.4200 per 10 grams in 1999. Sensex was 6100 in Feb and Nifty was around 1000. So, you can buy 15 Grams of Gold against Sensex and 2.5 Grams of gold against Nifty in 1999.

Today Gold is at Rs.49000 per 10 grams in India. Sensex 53000. Nifty 16000. You can buy 11 grams of gold against Sensex and 3.2 Grams against Nifty.

What does this indicate?

The USA is pumping money in the system since 9/11. They have printed so many notes that they are having asset-based inflation over there.

So, the share market looks that it's at the top now, but when compared with Gold – it's down by 54% in the USA.

This money printing has increased the balloon of Debt and all the markets have moved up like anything. But the value is going down day by day.

In India also the Sensex has underperformed the gold by 26%. In terms of Nifty, it has moved up slightly. It means – Nifty has kept the pace with Gold.

How to assess your financial status?

I see many guys feels happy with the price of their assets moving up. Ideally, take the value of your cash and asset balance in 1999 and compare it with the Gold price of Rs.4200 per 10 grams at that time.

Now, compare the same with today’s price and today’s value of your cash and assets.

To the extent you can buy more Gold – you are actually better off compared to 1999.

If you can buy lesser gold – it means you are not better off.

This is the most objective yardstick to see your financial performance in the last 20 years.

What is the challenge for normal people?

This post is not about the market or Gold. This post is about you and your financial progress. I am observing that inflation is moving up and interest rates are coming down and normal people are facing issues to run their expenses – particularly the senior guys who are 100% dependent on Interest income.

This post may not be useful to them as they have crossed the threshold of learning a new skill sets.

But if you are reading this post and if you think you still have the capacities and interest to learn new skill sets – you must focus on learning the fine art of investing.

The way you have invested 15-17 years for your graduation or master education – invest 3 years to master the art of investing. This will help you for your generations.

If you need help in developing mindset and skillsets related to investing – you can approach us.

Have A Great Weekend.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

 

Live With Passion…Invest With Passion.

 

Hitesh Parikh.