The Dow opened in 1896 at $40 and was $1000 in 1972. That is exactly inflation. The Dollar decreased to 1/25 of its 1896 value. That means, until 1972, the Dow merely kept par with inflation.
The original dow comprised of only 12 stocks. Adjusted for that, the picture looks even more desolutionary. If you invested money in the Dow in 1896, you would have in 1972 less money, then you put in.
Only under Clinton, the Dow hauled from 2700 to 10,500 by the end of his tenure (1993 to 2000).
Since Bush (2000) the Dow has not kept up with inflation again, similar like it didn't the first 78 years.
Without the 401's in Mutual Funds, the Dow would most likely be at 3000 today.
My question is, where does the myth come from, that investing in stocks or funds will increase your wealth over the long run?
Or is that a marketing lie to cash in on us stupid sheep?
2007-08-18
16:32:38
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8 answers
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asked by
Anonymous
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Investing