The Buzz

All markets and investing news all the time

Actually, the real Dow is still 11% below its record

March 6, 2013: 10:25 AM ET

In inflation adjusted terms, the Dow is still 11% below its all-time high set in January 2000.

The Dow Jones industrial average rose to a new all-time high Tuesday ... sort of.

The record that everyone is talking about is in nominal terms and doesn't take into account the impact of inflation, which has increased more than 10% during the past five years, according to the government's Consumer Price Index (CPI).

If you factor that in, the blue chip index is actually still about 11% below its all-time inflation adjusted high, which was set in January 2000, according to data from Ned Davis Research. And it's still about 9% below the level it was at in October 2007.

Related: Dow record? Who cares? Economy still stinks!

But it's not all bad news.

Investors in Dow companies also get dividend payments from all 30 index members. Those payments are included in the so-called total return of the Dow, which first topped its October 2007 record back in April 2011.

The Dow's Total Return Index (DJITR) subsequently hit new records in 2012 and 2013, and is currently 20% above the 2007 high.

Even after adjusting for inflation, the Total Return Index hit a new record last September, and is up 6% from the October 2007 level.

  • Dow record? Who cares? Economy still stinks!

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    The Dow Jones industrial average hit a new all-time high today, topping the 14,200 level for the first time. Forgive me if I'm not celebrating.

    Sure, I'm just as thrilled as the next guy and gal MORE

    - Mar 5, 2013 12:00 PM ET
Fear & Greed
Sponsored by

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! Is something wrong with me? A bank for 2nd day in a row? $GS down 1% despite crushing EPS estimates? Really?
Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 241 other followers