|Source: Stockcharts.com (see the full 1900-2014 Dow chart here)|
The Dow's Low In 1942 Was Below Its High In 1906 In Nominal Terms (Chart)
2/08/2014 03:40:00 PM
Here is some interesting market data I found at stockcharts.com. In the first half of the 20th century, the Dow Jones Industrial Average made a low in 1942 that was lower than its high in 1906. Meaning, if you were in a coma during the 1907 bankers' panic, panic of 1910-1911, Federal Reserve's creation in 1913, World War I, depression of 1920-1921, roaring 1920s, 1929 stock market crash, great depression, and the first half of World War II, your Dow holding (if you bought near the $103 peak in 1906, let's say $100) would be down 7% over a 36 year period (bottomed at $93 in 1942). You could say that the 1906 investor would have been up big if they cashed out in 1929, but what if they started to freak out near the 1932 low during the great depression (bottomed at $41.22). It's interesting that, after 1942, a secular bear market in nominal terms hasn't tested or pierced through a previous secular bull market peak. In real terms though, it looks like the secular bear market low in 1982 (after the Fed fought inflation) tested the secular bull market high in 1906, according to dshort. It's one big game of inflation, which is why central banks and government treasury departments are trying to prevent a deflationary collapse from happening this time around.
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