DAVE ROSS

The market breaks a record – or does it?

Mar 6, 2013, 6:27 AM | Updated: 6:50 am

The market yesterday blew right past its 2007 record, but here's what they don't tell you on your 401K statement: To truly match the 2007 record in terms of purchasing power, the Dow would have to gain 1,377 points this afternoon. (AP Photo/File)

(AP Photo/File)

Oh those were reassuring words on the news last night, as Scott Pelley said, “The stock market finally recovered all of what was lost during the great recession.”

Yes – except those numbers leave out one teensy weensy factor: inflation, which has been low, but not zero.

The market yesterday blew right past its 2007 record, but here’s what they don’t tell you on your 401K statement: To truly match the 2007 record in terms of purchasing power, the Dow would have to gain 1,377 points this afternoon. And even if it did, all that would mean was that you matched inflation.

But wait – it turns out the real record wasn’t in 2007!

The REAL record in terms of purchasing power was back in 2000. And to match that, the Dow would have to gain about 1,422 points this afternoon.

In fact, technically, you would be better off today if you’d pulled your money out of the market in 2000 and put it in a baggie than if you’d left it invested.

However, and this is why people keep buying stocks, you can easily manipulate the numbers to create a sense of hope. Because if you’d taken the money out of the baggie in March of 2009 at the bottom of the market, you would have doubled it by now!

$1000 in the S&P in March of 2009 would be $2,070 today. A million would have been $2,070,000. And if you’d been smart enough to invest $1 billion at he bottom of the market, you’d probably be serving ten years for insider trading.

More:
Calculate the inflation adjusted investment values

Dave's Commentary

Dave Ross on KIRO Newsradio 97.3 FM
  • listen to dave rossTune in to KIRO Newsradio weekdays at 5am for Dave Ross on Seattle's Morning News.

Dave Ross

car culture...

Dave Ross

Ross: Are we killing car culture? Or is car culture killing the US?

I don’t think the question is whether we're going to "kill" our car culture. The real question is can we stop our car culture from killing the U.S.?

4 days ago

drivers data insurance...

Dave Ross

Ross: As cars release driving data to insurance, is your driving my business?

Every move you make, every swerve you take, every lane change you fake – someone’s watching you. Do drivers have a right to keep driving data private?

11 days ago

rent control...

Dave Ross

Ross: Rent control was never the answer in Wash.

The rent control bill died in the Washington State Legislature this week, even though Democrats control both houses.

1 month ago

end of democracy...

Dave Ross

Ross: Conservative activist earns applause for pledging an ‘end of Democracy’

The theme from Jack Posobiec's speech is that Jan. 6 was a righteous attack not on democracy, but on those who threaten democracy.

1 month ago

Image: Rep. Lauren Boebert, R-Colorado, is seen on Capitol Hill on Jan. 6, 2023. (Photo: Alex Brand...

Dave Ross

Ross: Voters can help cull bad politicians from the herd early

Let's remember that just about every occupant of a higher office once occupied a lower office, and was put there by us, Dave Ross says.

1 month ago

Super Bowl celebration...

Dave Ross

Ross: The NFL does it again

The NFL once again put on a show that was able to keep me tuned in for four hours even though I had no stake in either team.

2 months ago

The market breaks a record – or does it?