Fascinating chart below. It seems these “new” record stock market levels aren’t exactly new. We’ve been here twice before, when that old nasty inflation is taken into account. On an inflation adjusted basis, the stock market is exactly where it was in 1999 and 2007. We know what happened then. Will the 3rd time be a charm? Are you feeling lucky? Will Janet save the day?
As the stock market continues to trade in all-time record territory, today’s chart provides some perspective by illustrating the inflation-adjusted Dow since 1900 — there are several points of interest. For one, while most major US stock market indices trade well within record territory, when adjusted for inflation, the story changes. For example, the inflation-adjusted Dow still trades below both its 1999 peak — albeit not by much (only 0.2% below its 1999 all-time, inflation-adjusted record high). Another point of interest is how the inflation-adjusted Dow was unable to punch through the 16,000 level on its previous two attempts (see red dashed line) — the market is currently making its third attempt.