Stock market performance vs inflation

It's currently at 1,, the highest level it has ever been. There's just one problem: That record level is in "nominal" terms. It doesn't account for inflation.

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Thanks to inflation, you have to make more money today to be able to buy as much as you did a few years ago. Perhaps Prince was onto something when he told us all to "Party like it's You think you're richer than you actually are.

When you go out to spend your earnings from the stock market, you quickly realize that inflation has eaten up some of your gains. Get ready for lousy stock returns. This stream of income remains relatively steady whether the company's stock price goes up or down.

It first crossed that line in May , according to Ed Clissold, U. Stocks are still your best investment. The Dow Jones industrial average , another closely watched measure of the U.

CPI Vs. Stock Prices | Finance - Zacks

The Dow is calculated using the average stock price of a group of 30 big companies. How high can Apple stock go? Then there is the Nasdaq. Considered a proxy for the technology industry, the Nasdaq has yet to reach its nominal all-time high, let alone its inflation-adjusted high, from At that time, there was a massive bubble in Internet stocks.

In other words, stocks could go up more, but investors shouldn't get complacent. The fact that stocks are at all-time nominal highs suggests the market is vulnerable to a pullback.

Still, he added, "corrections in a secular bull market tend to be short and shallow. Start your day right with the latest news driving global markets, from major stock movers and key economic headlines to important events on the calendar.

Daily newsletter, Sunday through Friday. Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes.

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