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Old 09-21-2012, 10:32 AM
 
177 posts, read 196,832 times
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I miss the good old days of the late 80s when it was down around 2,000. I know that's now likely but I'd at least like to see it get back to the 6,000 level it was at in early 2009. At the rate it's going, I'm worried it's going to hit 14,000 soon which, contrary to popular belief wouldn't be good.
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Old 09-21-2012, 02:44 PM
 
Location: WA
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A 1985 dollar is worth less than fifty cents today. Today's Dow is worth about the same as then in constant dollars.
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Old 09-21-2012, 08:31 PM
 
2,729 posts, read 5,181,726 times
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Quote:
Originally Posted by cdelena View Post
A 1985 dollar is worth less than fifty cents today. Today's Dow is worth about the same as then in constant dollars.
Heh?
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Old 09-21-2012, 10:02 PM
 
Location: Victoria TX
42,579 posts, read 86,681,866 times
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The Dow is not an economic indicator of anything. If very rich people think the Dow will go up, they will place orders for shares, and their demand will cause the price to go up. It is a self-fulfilling prophecy that operates in a vacuum. Later on, when they fear that their share values might go down, they offer to sell them, and sure enough, the price goes down.
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Old 09-22-2012, 09:55 AM
 
Location: WA
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Quote:
Originally Posted by MeInDenudinFL View Post
Heh?
Inflation has reduced the value of the dollar to half of what it was so it makes sense that it takes more dollars to buy anything. Any comparison to the past DOW index is flawed as the value of the dollar is different and the composition of the DOW is different (it is only thirty stocks that are changed regularly).
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Old 09-24-2012, 08:44 AM
 
707 posts, read 1,290,472 times
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Market priced in dollars looks good. Market priced in gold or silver is pretty low. Effects of a devaluing currency
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Old 09-24-2012, 09:12 AM
 
2,729 posts, read 5,181,726 times
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Quote:
Originally Posted by cdelena View Post
Inflation has reduced the value of the dollar to half of what it was so it makes sense that it takes more dollars to buy anything. Any comparison to the past DOW index is flawed as the value of the dollar is different and the composition of the DOW is different (it is only thirty stocks that are changed regularly).
You have it backward in your original statement. I understand your intent though. The statement " a 1985 dollar is worth less than fifty cents today" is wrong.

A 1985 dollar is worth 2 dollars and 22 cents [(1 + 0.03)^27] today, if we, say, assume 3% of annual inflation. Yes, it take more dollar to get the same "value" in the past, given value doesn't change.
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Old 09-24-2012, 07:31 PM
 
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Everyone looks at the Dow, but that is only 30 companies out of many, and the players keep changing.
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Old 09-24-2012, 09:22 PM
 
22,602 posts, read 24,422,675 times
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Not for a while..........Big Brother has jacked so much money into the system......a big sugar high for a long time to come.

And the investment options are limited....you will make NO money on safe investments.......banks have no need to pay for deposits due to all of the cheap money floating around.
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Old 09-25-2012, 03:01 AM
 
105,997 posts, read 107,976,655 times
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you will make no money from safe investments? are you kidding us? the 30 year treasury bond has beaten every asset class for 30 years now.

we have seen 20-35% gains a year just the last few years.

it dont get any safer then that.

what you really mean is picking the wrong asset class namely cash at the wrong time is a poor investment. its no different then picking bonds in rising
inflation or stocks in the beginning of a slide into a recession.

if you bet the ranch on cash when rates around the world are falling you lost ,plain and simple. its no ones fault but your own for picking something at the wrong part of the market cycle.

Last edited by mathjak107; 09-25-2012 at 03:35 AM..
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