In order to gain some long-term perspective of the magnitude of the movements of the Dow Jones Industrial Average, Chart of the Day provided an inflation-adjusted graph dating back to 1925.
The following observations are of particular interest:
• The bear market that finished in the early 1980s was almost as arduous as the one that concluded in the early 1930s.
• The inflation-adjusted Dow is now less than double where it was at its 1929 top. It is also trading only a relatively modest 30% higher than its 1966 peak – not that impressive considering the long period involved.
• Considering the recent rally, the Average gained 30.7% since its March 9 low which is slightly more than the inflation-adjusted Dow’s performance from its 1966 peak to today.
Source: Chart of the Day, June 19, 2009.
