Dow, adjusted for inflation, is at 1966 level

Igor Chudov · 2009-03-13T20:56:33+00:00

The year nineteen sixty six is not a typo. According to Larry Summers,adjusting for inflation,``Earlier this week, the Dow Jones Industrial Average, adjusting forinflation according to the standard Consumer Price Index, was at thesame level as it was in 1966''.This, of course, ignores dividends, which were substantial at varioustimes and less so substantial at other times. But it underscores thatblind buying of stocks "regardless of price" can lead to very mediocreresults.By the way, this speech is excellent and very easy to follow. I savedit on my webpage just to give this link (I received it on a mailinglist that I read).

Mar 13, 2009 21 Replies

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Will Trice 17 years ago

Using your CPI reference (I used Elle's before), your 12/2008 price adjusted back to 1965 is only $3.71 [(869.75/35.5) / (210.228/31.8)] for an annualized return of 3.1%. Just pointing out that for once my math was OK... I think...

-Will

william dot trice at ngc dot com

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