This shows the Dow adjusted for inflation over the years. The red trend line is an exponential growth curve (assuming a constant growth rate) that best fits the data.
This shows the Dow plotted on a logarithmic scale (so constant growth is a straight line).
Forgive me for not being all that excited about buying the dips. We're well above the long-term average. What brought us below the line in the past?
1928 to 1932 saw a credit crunch with rising unemployment.
1965 to 1980 saw rising inflation with rising unemployment.
What are we experiencing right now? I'd argue we might be seeing the "best" of both eras: credit crunch, rising inflation, and rising unemployment.
This is most certainly not investment advice. I'm just pointing out what's been going on in the rear view mirror, that's all.
Source Data:
St. Louis Fed: Consumer Price Index for All Urban Consumers: All Items
Yahoo Finance: DJIA Historical Data
As seen on Yahoo's website, historical chart data and daily updates provided by Commodity Systems, Inc. (CSI).
Disclaimer: Yahoo provided a spreadsheet download link so it is fairly clear that I was free to download the data. Since I am not actually sharing the raw data and I am crediting the sources, I am assuming that I am not infringing on anyone's copyright.
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