ALERT: James Turk – The World Is About To See A Historic Shift Out Of Stocks Into Gold

ALERT: James Turk – The World Is About To See A Historic Shift Out Of Stocks Into Gold

As we kick off the final week of trading in November, today James Turk told King World News that the world is about to see a historic shift away from stocks and into gold.

James Turk:  “A lot of publicity is being given to the record highs in the stock market, Eric. The result is that people are getting very excited about the Dow Jones Industrials and the S&P 500. It is easy to sense the froth that one sees at market tops is building, which leads to an important question…

Has the stock market topped out? This is actually a trick question, Eric. The answer depends on which currency you are using to measure value as the key factor to determine whether a top has been reached.

I always use two currencies, the dollar and gold. Using two currencies leads to two different answers, which can easily be illustrated with this chart of the Dow Jones Industrial Average using gold as the measuring stick.

kwn-turk-i-11282016

While the Dow Industrials is at a record high in dollar terms, it is 50% below its record high in gold terms. This means that the Dow is in a bear market when measured in terms of gold. That’s simply another way of saying that you are better off owning gold than the Dow.

So gold is in a bull market when measured against the Dow. Because this point is critical to understanding value and how investors manage their portfolios, it requires further explanation. At any time, every marketable asset can be valued, generally speaking, in three different ways. An asset can be overvalued, at fair value, or undervalued. We use an asset’s price to make that determination, but here’s where it gets tricky. Using the dollar to measure an asset’s value can be misleading.

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King World News

Interviews with market experts from around the world with a focus on precious metals.