Gold will surprise in this decade

Today’s Daily Byte

Hello and welcome to the Weekend Investing Daily Bite of August 26th, and what a day it was! Nifty surged by a couple of hundred points, reclaiming the 25,000 mark.

The markets now seem content with the expectation that rate cuts are on the horizon, with half a percent cut almost baked in, potentially more by mid-September. The market continues to move forward, but it’s important to note that . . .

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Gold will surprise in this decade

Over the past ten years, the U.S. stock market has seen a massive surge in its market capitalization. The Wilshire 5000, which represents the vast majority of major stocks in the U.S. market, has grown from $25 trillion to around $75 trillion. In comparison, the market cap of gold has only increased modestly from about $8 trillion to $12 trillion.

This widening gap between the value of U.S. stocks and gold is significant and could signal an upcoming shift in the market .. . . . .

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Be aware of movement across market segments

Understanding how stocks move across market cap categories is crucial for investors. Many people assume that a small-cap stock will naturally grow into a mid-cap and eventually into a large-cap company.

While this can happen, the reality is more complex. Many large-cap companies are actually shrinking into mid-caps, and some mid-caps are becoming small-caps. Even more concerning, some companies disappear altogether.. . . . .

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