Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Inflation adjusted stock prices-ouch!
Old 02-02-2008, 03:28 PM   #1
Recycles dryer sheets
mark500's Avatar
Join Date: Feb 2006
Posts: 146
Inflation adjusted stock prices-ouch!


However, when you take inflation into consideration, we can see from the red line (which is the "inflation adjusted NYSE Index stock price" in current dollars) that in inflation adjusted 2007 dollars the index began 1966 just above 3200 and fell to 1312 in July of 1982.

So rather than a 23% increase, if you had held stocks for the 16 years from 1966 to 1982, you would have actually lost 59% of your purchasing power due to inflation.

What is the Real Inflation Adjusted Stock Price?

mark500 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-02-2008, 03:44 PM   #2
Thinks s/he gets paid by the post
twaddle's Avatar
Join Date: Jun 2006
Posts: 1,378
Yeah, the 1966-1982 period is responsible for many of the failure sequences in FIREcalc.

I like these stock return matrices as a visualization tool:

Matrix Options

Take a look especially at the after-tax real return matrix.
twaddle is offline   Reply With Quote
Old 02-02-2008, 03:49 PM   #3
Full time employment: Posting here.
Join Date: Oct 2003
Posts: 961
[cough] reinvesting dividends [cough]

The after inflation annualized returns for various assets from 1/1/1966 - 12/31/1981 [16 years]:

TSM        -0.44%
S&P 500    -0.97%
Tbill      -0.15%
5 yr Treas -1.16%
Lt Treas   -4.17%
- Alec
ats5g is offline   Reply With Quote
Old 02-02-2008, 04:18 PM   #4
Full time employment: Posting here.
Join Date: Oct 2003
Posts: 961
btw - here is the spreadsheet that I used. Go the the "annual" tab and change the two years in yellow to generate the nominal and real returns from say 1926 - 2000 in row 2. The %'s in row 7 of the "annual" tab are the % in each asset [TSM, S&P 500, Tbill, 5 yr Treas, LT Treas].

[disclosure: I didn't create the spreadsheet. Some guy named Richard that used to post on the VD M* board did]

- Alec
ats5g is offline   Reply With Quote
Old 02-02-2008, 05:33 PM   #5
Thinks s/he gets paid by the post
twaddle's Avatar
Join Date: Jun 2006
Posts: 1,378
Just for fun, I looked at the 1929-1941 (13 year) period using Alec's toy.

BTW, these are annualized returns while the OP was talking about total damage during the period.

TSM: -1.9%
S&P 500: -1.7%

And then the best period in history (1982-1999):

TSM: 14.1%
S&P 500: 14.7%

Quite a range, eh?
twaddle is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Gasoline prices adjusted for CPI Nords Other topics 16 05-06-2007 11:35 AM
Inflation Adjusted Results babyape FIRECalc support 1 03-15-2007 02:45 PM
How Does Inflation Adjusted Work astroboy FIRE and Money 1 10-07-2005 01:20 AM
Inflation Adjusted Home Profits Means ?? astroboy FIRE and Money 5 03-26-2005 04:42 PM
Vanguard Now Offering Inflation-Adjusted Annuities intercst FIRE and Money 24 01-10-2005 01:14 PM

» Quick Links

All times are GMT -6. The time now is 11:32 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.