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S&P is measured in nominal dollars, so of course it is near its all-time high. It should almost always be at its all-time high just because of inflation. So thi
by jblow 11y ago
S&P is measured in nominal dollars, so of course it is near its all-time high. It should almost always be at its all-time high just because of inflation. So this doesn't tell you much.
- tedsanders 11y agoSure, ok. But even adjusting the S&P 500 for CPI inflation, it's near all time highs. And if we're going to be careful, you have to also take dividend reinvestment into account, which has the opposite effect of inflation. Neglecting dividend reinvestment will cause indices underestimate the true growth of a dollar. Here's a quickly Googled source showing CPI-adjusted S&P 500: http://www.multpl.com/inflation-adjusted-s-p-500 http://www.multpl.com/inflation-adjusted-s-p-500 Here's another quickly Googled source showing dividend-reinvested S&P 500 returns: http://www.indexologyblog.com/2013/08/08/inside-the-sp-500-dividends-reinvested/ http://www.indexologyblog.com/2013/08/08/inside-the-sp-500-d... I wish I could find a decent source that incorporated both effects.