I don’t want to develop a reputation here for repeating the current administration’s talking points, but this struck a nerve: In March, Larry Summers pointed out that the Dow Jones Industrial Average, adjusted for inflation, was recently at the same level it was in 1966.

At the risk of giving away my age, I’ll tell you that that suggests buying stocks right now could be the deal of my lifetime.

Of course, a pretty major caveat to this is that the DJIA really doesn’t represent the market. (Shhh! Don’t tell anyone; people might stop watching cable 24/7 to get the latest Dow quote.) It actually reflects only a narrow slice.

Perhaps a better gauge of the overall market is the change in the S&P Composite Index. By this measure, prices aren’t lower than they’ve ever been in my lifetime—they’re just lower than they’ve been since I left grad school.

S&P Composite Index, 1995–2009

(Data adjusted for inflation)

S&P Composite Index, 1995-2009

Source: Robert Shiller, Yale University.


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