Saturday, October 13, 2007

the Dow's real, inflation-adjusted value over the last seven years is actually a 68% loss!

Since its peak in January 2000, the Dow has lost as much as 68% of its value in terms of most other assets!

"Let's say you bought all of the stocks in the Dow Jones Industrials on January 3, 2000. And for simplicity's sake, we'll just say you paid $11,357 (the index's value in dollars) for the whole lot.

Now, fast forward to today, with the Dow hovering around 14,000. In pure nominal terms, the index has gained 2,643 points since January 2000, or 23.3%.

Never mind just how lousy that is when you consider it translates to an average annual return of just 3.32% over seven years.


Instead, compare the Dow's measly gain to the performance of a basket of commodities (in this case, the Commodity Research Bureau's CRB Index).

Dow's gain since January 2000: 23%

CRB's gain since January 2000: 307%!

Translation: Your dollars have lost so much purchasing power as measured by basic items such as oil, sugar and cotton that instead of a 23.3% gain, " Larry Edelson

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