Some long term data to provide some context.

GDP Nominal 1885-2007……………………..+5.97% compounded
Dow Jones 1885-2007………………………+5.05% compounded
Inflation 1885-2007………………………….+2.58% compounded

Thus we can see that the DJIA has tracked the growth of the economy quite closely, returning a positive real return. This does not include dividends, which would increase the return substantially. From a viewpoint of Dow Theory however, the data correlates.

Advertisements