CW 712 FBF - Nominal Dollars vs Real Dollars and Understanding Investor Psychology with Investment Counselor Sara
Jason Hartman talks with investment counselor, Sara, about investor psychology, overcoming obstacles and getting out of our own way. \xa0The smoke-and-mirrors propaganda perpetuated by mainstream media (lamestream media as Sarah Palin says) in reporting the new high in the Dow Jones Industrial Average (DJIA). \xa0
They almost always fail to distinguish between nominal dollars and real dollars. \xa0Jason illustrates how investors have actually lost money in inflation adjusted dollars and how the Dow has to increase a lot more before investors break even based on the two peaks. \xa0This lie is even worse when one considers how inflation is underreported in the consumer price index (CPI and CPI-U) due to weighting, substitution and hedonics (the hedonic index). \xa0Another misrepresentation is the\xa0\u2018core rate\u2019 or \u2018core inflation\u2019 which strips out food and energy because they\u2019re too volatile. \xa0Jason shares some interesting data from\xa0ZeroHedge.com.