Jim,

The media is currently spinning the stock market’s best July gains since 1989 & 1997. It is important, however, not to lose sight of the forest through the trees. While the rally in July was certainly impressive in both nominal and real terms*, it remains a small up-tick within the context of a secular bear trend. Please remember that the stock market’s rally of 1932 to 1933 and 1935 to 1937 were also very impressive. Unfortunately for buy-and-hold investors these rallies were followed by the devastating decline of 1937 to 1942. The stock market did not make new sustained real highs until 1951.

* Stock market priced in a stable currency such as gold.

CIGA Eric

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