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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Tunica Albuginea who wrote (40366)	5/16/1999 8:25:00 PM
From: j g cordes	Read Replies (1) \| Respond to of 120523

Tunica.. yes, and from MDA similar thoughts.. Jim exchange2000.com Stock options are only realized when exercised... perhaps you mean capital gains outside of wages? If that's the case, you'd have to examine those gains historically the same way wages & inflation have been compared. My guess is that there has always been a minority of investors who have substantial gains in the markets. However, I'll hazard also that a good percentage of that money is reinvested into new projects as seed capital or socked away in long term trusts or loaned out at various rates of return. Wage money on the other hand, is usually spent more quickly in the consumer marketplace, affecting the prices of goods and services. While its not fair, there's only so much you could reasonably buy if you for example had a ten million dollar stock option windfall. If you bought a Mercedes, a new porch, and a poodle you'd likely have an accountant try his best to shelter the rest from taxes. Therefore your question is, how does sheltered income from a booming stock market affect inflation? exchange2000.com Regarding the inflationary effect of off wage perks like stock options, their potential quickly evaporates in value when the business or economy slows down. The core issue with money/inflation is how the money is spent and if that process allows producers and sellers to raise the cost of goods and services. If money (wages, perks, stock profits, inheritance etc) is not spent then prices aren't chased up by demand. Its also obvious the traditional measure of inflation doesn't describe what's happening today. Inflation is rampant in the markets, in stock prices, not in real estate or goods and services.