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Strategies & Market Trends : Maximum Investing

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To: Howard Bennett who wrote (38)9/17/2002 6:56:14 AM
From: Robert Scott   of 81
 
I don't know if I agree with Jimmy Rogers. You have to keep in mind that Jimmy's comments are very often self serving. He has been a bear on the US for many years and is usually invested abroad.

I think it is a matter of interpretation to a certain extent. For many of us, some of the inflation components are irrelevant. For example, I believe there is an interest rate component. If I have no debt or a fixed rate, it doesn't affect me. If I'm a non-smoker, the affect of price increases on cigarettes is nil. So while the inflation rate may be 5%, MY inflation rate could be significantly lower or higher.

I do believe that the number is a bit of a swag, meaning that it is not subject to completely accurate computation. There are certain assumptions used I believe in the numbers. But it is helpful, at the very least, on a relative basis.

As for inflation adjusted bonds, equities are the only investment that significantly beats inflation over time.
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