THE INFLATION ADJUSTED DOW

By Chart of the day

For some long-term perspective, today’s chart illustrates the Dow adjusted for inflation since 1900. Of interest is that the inflation-adjusted Dow has traded within the confines of an extremely long-term upward sloping trend channel over the past 111 years. It is also of interest that the secular bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, while the market action from the inflation-adjusted record high of 1999 to the financial crisis lows of 2009 was severe, the magnitude of this decline was much less than what occurred with the bear markets that concluded in the early 1930s and early 1980s. More recently, the Dow has retraced 74% of the financial crisis bear market with the inflation-adjusted Dow currently trading 19% off its 1999 record high — a rather dramatic turnaround considering the magnitude of the recent financial crisis.

Notes:
– Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

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Chart of the day

Chart of the Day provides insightful charts with regards to the US stock market, US economy, gold and associated indicators. At any given moment our focus is determined by market conditions and feedback from our subscribers. Some of our subscribers consider Chart of the Day as their own independent investment research department.

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  • Dan Dell

    stop with the dow please. its a price index. but then again, you are all technical analysis, so price action is all that matters to you. thanks for the thoughts, though.

  • Ken

    I should have known, advertising for some guys newsletter. I’ve seen this chart before, I think the experts showing the chart were calling for a drop to the lower trendline. Let’s guess and say Dow 5000ish.

  • AWF

    From the HyperInflation bunker:

    Check this out—This chart is relevant from 1971 to the present

    GDP divided by Gold (Gold Price unpegged to USD)

    http://pricedingold.com/us-gdp/

    Here is a litte tale on current GDP

    http://econintersect.com/wordpress/?p=7218