Tuesday, October 16, 2012

Ten Years Gone - The DJIA And The Economic Decade


It's been 10 years since the market bottomed after 9/11 and the internet bubble crash. The DJIA is 6000 points higher now than it was then, but for the most part the market's performance over the past decade has been a wash. Unless you timed that bottom perfectly in Octoner 2002 your index funds are worth about as much as they were then (or less if you adjust for inflation).

The most important question for investors is were these last ten years a consolidation in a secular uptrend that began in the early 1980's or are prices forming a massive top formation that will lead to much lower prices in the future. If you accept the premise stock performance follows the economy, then take a look at how the key economic data series have changed on a ten year basis and you'll have the answer to the question...