Once again, the Dow Jones has tumbled back towards 10,000 having failed to escape this level. Here are some quiz questions:
1. Can you remember when it first hit 10,000
2. On how many separate days has it traded THROUGH 10,000 – that is, had a High above that level and a Low below that level
3. Given (1) how do you feel about investing in equities for the long run
4. Given (3) how confident do you feel that the equity markets will provide lots of capital for the future?
Answers ‘below the fold’
1. It was March 1999
2. 165 times! Look at this chart
3. Conned. Particularly if you bought this book. Brad DL beautifully rips it up here.
4. Uneasy. We need people to feel good about taking risks if we want economic growth. though some may reason that this diverts money from ‘pointless’ speculation to real investment, actually you need both – you want people to see a big market to sell their ‘real’ investments into later. Having no happy secondary market undermines the primary stuff.
Freethinking Economist 
Is that total return, or capital only?
that’s capital, so yes you’d have got dividends. But 2-3%?
Per annum. With the bonus, if you re-invested, of buying through the dips. I don’t know what the overall chart would look like. But it’s never quite as bad as the capital-only charts make it out to seem.
Secular bear markets repeat over and over again in the historical record, as do secular bull markets. Bulls have lasted 15-20 years (think 1982-1999/2000, or 1946-1967). Secular bears have lasted 13-18 years (think 1967-1982 or 1929-1946). This extended pattern of returning to some benchmark level for an extended period is one perfect characteristic of a secular bear market. As I see it, the secular bear we’re in now began with the dot.com bubble peaking in March of 2000, and if history is any guide, is only likely to end after 3-7 more years. Once the global economy wrings out the last excesses of our debt-driven expansion, I’m pretty confident a new long-term, secular bull market will ensue. It’s hard to imagine it at this point, but we really do live in an era of resilient capitalist free markets and economies.
But the figures are surely no different for 11,000 or 10,345?
Ken, do you have any data about what you write? I’m not doing the sceotical bit, just interested.
Adding dividends does make a fair differences – I’ve rebased these to be the same a the start of 1997, when your chart begins.
For some reason your home page doesn’t seem to be updating?