The S&P 500 Matches Inflation-Adjusted High

Great news! Adjusted for inflation, the S&P 500 has done nothing in the past six years! And it’s taken a lot for us to get there.

This morning, the government released the inflation report for September. I had to do a little massaging of the numbers, but if we assume the inflation trend that we had in September continues in October, then the S&P 500 just surpassed its inflation-adjusted peak from October 2007.

Note that this is just the S&P 500 and it doesn’t include dividends. All things being equal, you can expect the market’s dividend rate to follow the inflation rate fairly closely. While we’re above the 2007 peak, the S&P 500 is still about 18.5% below the inflation-adjusted peak from 2000.

We can never say for certain where the inflation-adjusted index is because there’s some lag time before the inflation report comes out. Here’s the latest FRED chart which goes from 1957 through September 2013. The next data point should reflect the six-year high.


It’s interesting to see that the 2009 low nearly matched the 1966 high.

Posted by on October 30th, 2013 at 11:56 am

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