careinke wrote:vtsnowedin wrote:If you adjust that graph for inflation after the end of the gold standard you get a more realistic picture of the value of the market.
Also consider that there are about 130 million more Americans today then were in the economy in 1970. That alone would account for about a 40% rise in the value of the economy as measured by the DOW.
True, the Fiat dollar has lost 95% of it's value since 1971 when Nixon "temporally" decoupled the Dollar from Gold. This makes the value the DOW today worth about $1,700 in 1971 dollars. Not very impressive.
Peace and welcome to the Metaverse.
1). Based on what math?
2). The Dow today is largely irrelevant. It's only 30 industrial stocks. Something like the S&P 500 index or a broad market index of thousands of stocks at least tells us something.
In the real world, overall, the S&P 500 has risen about 7%, including dividends, in real (inflation adjusted) dollars since 1929 (when good record keeping supposedly began). Since then, the nominal value has risen about 10% (not inflation adjusted).
In the real world, using a credible citation vs citation free arm waving, the S&P 500 was at about 670 in 1971 in inflation adjusted returns.
https://www.macrotrends.net/2324/sp-500 ... chart-dataI have found macrotrends to consistently be reliable, re their figures.
Or if you want the S&P 500 without inflation adjustments, it was 93.49 at the beginning of 1971.
4445 / 93.49 = 47.5+
https://www.multpl.com/s-p-500-historic ... le/by-yearSo, since 1971, the S&P 500 has had MASSIVE returns compared to inflation. And that's BEFORE dividends, since the indexes don't include dividends. So roughly double that, since over time, roughly half of broad stock market index returns are from dividends.
4445 / 670 = 6.6+ Double that for the dividends, and you get a 13.2 times return, inflation adjusted since 1971.
4445 / 93.49 = 47.5+ Double that for the dividends, and you get a 95 times nominal return since 1971.
Various inflation calculators like:
https://www.usinflationcalculator.com/https://www.aier.org/cost-of-living-calculator/Show total inflation from 1971 to have $1 becoming about $6.70 in 2021.
NOTE that your claim that the dollar has lost 95% of its value in 1971 is NONSENSE. It's lost a lot, but 1 / 6.7 is roughly 15%, not 5%. So you're off on your inflation claim by a factor of THREE.
So, which is bigger: 95 or 6.7?
Dividing 95 by 6.7, I get 14.2, which is mighty close to the 13.2 we get for the inflation adjusted return, considering I'm using a very round number for the dividends.
So in reality, inflation adjusted stock market total returns since 1971 have been MASSIVE, using facts and credible references for inflation and a reliable stock index.
Do you have facts and data from CREDIBLE sources to present, or just more fact free hand waving in rebuttle?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.