In this article I intend to show that apparent gains made in UK stocks in the latter period of the 1970s were in fact not as good as many investors thought, and were in fact illusory, the illusion caused by the stoking of inflation.
I think the parallels with our current investment environment are important.

Here are two very good options for buying gold & silver and having them stored for you in secure insured vaults:

Bullion Vault ......... and ......... Gold Money

For more details see this:

Why & Where to buy Gold & Silver
http://neuralnetwriter.cylo42.com/node/2535

This is a chart of the UK FTSE100/30 from 1970 till now:

You can see the low in 1975. It would appear that investing in 1975 was a golden opportunity. From that point on the market climbed. But looking at the stock market in isolation is meaningless.

This is a CPI adjusted version of the chart (only the post 1980 period includes the fiddled CPI):

Now the period from 1975 to 1980 looks a little different. The market did indeed climb from 1975, but it was then stagnant for years, even dropping back significantly in 1977.

And when the FTSE is measured in the number of oz of gold needed to buy 1 share:

This shows an even worse picture for the stock market. The number of oz of gold required to buy 1 share of the FTSE was about the same in 1980 as it was in 1975. No gain at all in 5 years. Anyone buying into the market in 1976 would have made nothing until 1985.

This chart shows how gold performed over the same period:

You can see how the price of gold rocketed in the 1970s.

And the CPI chart shows how the inflation rate accelerated in 1975:

The following charts show the 1970 period in more detail:

First the FTSE, with the low point in 1975:

That does look like a great buying opportunity doesn't it

But this is what happened to the CPI:

And to gold in that period:

So what does the real value of the FTSE look like during that period?

Very poor when compared with gold.

These charts demonstrate the cycle between equities and gold. For some periods equities win. For others gold is the winner.

This demonstrates the importance of two things:

1. Using inflation adjusted charts.

2. Measuring the value of something in oz of gold.

This final charts shows how the FTSE has performed relative to gold since 1970. IMO it points to the FTSE measured in oz of gold going lower, back to the low in the 1970s at least.

Now is not the time to invest in equities.
Now is the time to hold gold.

Here are two very good options for buying gold & silver and having them stored for you in secure insured vaults:

Bullion Vault ......... and ......... Gold Money

For more details see this:

Why & Where to buy Gold & Silver
http://neuralnetwriter.cylo42.com/node/2535