Maybe you are rich, you wise investor. It seems to me that anyone in the market for a long time should be rejoicing today, because at 13,000, he should be wealthy. Look at the stats:- The Dow Jones hit 1,000 on June 11, 1981. At that time eggs cost $0.85 a dozen, gas was $1.35 a gallon, and electricity sold for $32 per 500 kWh.
- The Dow Jones climbed to 5,000 on November 21, 1995. Eggs were selling for $0.88, gas for $1.19, and power at $50 per kWh.
- The Dow reached 10,000 on March 29, 1999. Eggs reached $1.00, gas was a measly $0.99, and electricity cost $45 for 500 kWh.
If I had $1.00 on the day the Dow hit 1,000 in 1981 (and I'm pretty sure I had at least one), that same dollar would buy $2.26 worth of goods today.
If I'd put that same $1.00 in the market, I'd have $13.00 today. Duh.
So why aren't I rich? A pension instead of a 401K. A taste for travel and credit. And a lack of faith in the long-term health of the American economy.
How many people will look back from 25,000 and realize they've repeated my mistake?
Closing Bell: Can't go up every day (BAC, HE, HPW, COMS, BRCD, WMT, AMD)
Wal-Mart grows profit and cash flow in Q3, but comps still ailing
Chasing Value: Ten stocks for 2010 -- Part 2
Reader Comments (Page 1 of 1)
4-20-2007 @ 4:18PM
Bill said...
A dollar in 1981 would buy you $2.26 worth of goods today? What happened to inflation during those 26 years???
4-20-2007 @ 4:22PM
Tom Barlow said...
Fortunately, I don't have to calculate it; the government did it for me. See the Inflation Calculator
4-20-2007 @ 4:23PM
Tom Barlow said...
Oops
http://www.bls.gov/cpi/#data
4-20-2007 @ 6:59PM
Sherri said...
Not me. I begged my husband to borrow money when the Dow was in the 700's in the late 1970's. He refused. We didn't really start investing until I went back to work in 1986. He was still frugal and we put my salary into stocks. Now, we are retired and very happy with the long term performance of our stocks.
4-21-2007 @ 8:12AM
dan barlow said...
I'd love to see 25,000 in my lifetime (age 52) but look how long it took to reach 1,000. Are we going to be like Japan in which the Nikkei index nearly reached 39,000 in 1989 and, despite a strong economy, still can't attain half that level 17 years later. Are we still going to be the "player" in the evolving global economy? Like Tiger Woods, I suspect the "irrational exuberance" rally of the 1980's and early 1990's was a once in a lifetime opportunity that the majority of investors failed to capitalize on.
4-21-2007 @ 8:15AM
Tom Barlow said...
You make a good point, stranger. But I'm not sure mankind's supply of irrational exuberance will ever run dry. As long as we all continue to believe it should grow, it probably will.
4-22-2007 @ 8:01AM
glen said...
Sure Dude, But lets look at the price of a barrel of oil from those early and today's prices. Why don't we go after the oil companies. Dosen't anyone see the price of gas and foodstuffs? Heaven forbid we have another terrorist attack, then we start all over again..But some of us put alot of money into G.E. days after 9-11 and scored quite well
4-22-2007 @ 8:01AM
Tony Bush said...
As a novice, How I do get started in the investment world?
4-22-2007 @ 1:12PM
Janna Kanga said...
In Dec. 1979, I put $30,000 down on a house that I bought for $156,000 which is now worth $885,000, or 29.5 times by initial investment. If I'd put that $30,000 in the stock market and it was worth 13 times my initial investment, I'd have $390,000. Nah, real estate beats stocks anytime anyhow. I don't have to sell it to cash out -- I can refinance it for a taxfree cash payout. The market's had its ups and downs over the past 28 years, but I prefer an investment I can see, touch, feel -- and live in or rent out. It's my best retirement plan.
4-22-2007 @ 1:14PM
Tom Barlow said...
You must live in a incredibly popular place! The house I bought in 1978 for 50K is now worth 300K, or 6x my investment. Of course, factoriing in the rent I would have paid, I like it as an investment too.
4-23-2007 @ 12:15AM
RANDY said...
I bought my home for $195,000 in 1993, It is worth $595,000 today. I invested $65,000 in the stock market in 1998, and it is worth $475,000 today. Which is the better investment? I chose the stock market, it is liquid, and totaly diversified. What do you think?
4-23-2007 @ 11:46AM
leon glassgold said...
My fa,ilt bought a town house in NYC in 1932 fiir $32,000. Sold it in 1973 for $464000. Property recently for $10.000.000. How can you beat realestate. Just have patience.
4-24-2007 @ 7:57AM
Judy Jones said...
Of course the Dow is only 30 stocks. What about the Nasdaq? It still is nowhere near the 5-6000 that it was before 9/11. You are also assuming that the person would have invested in a stock that actually increased in value. There are many that have gone down or are gone totally......