Friday, July 20, 2007

S&P 500 - Comparing nominal vs inflation adjusted performance


Hat tip again to Barry Ritholtz for this nice chart.

It's kind of interesting that almost all other economic metrics get adjusted (normalized) for inflation (e.g. GDP and hourly wages) but that we don't apply the same scaling adjustment to our stock market indices.

The long time scale for this chart makes it even more interesting. Note the devastation of the 1970s and how the inflation adjusted value has not yet recovered to its year 2000 peak.

1 comment:

Scott Gibson said...

Not as sexy as Gapminder/Google Motion Charts, but I've got some interesting government trend charts at: www.supportingevidence.com/Government/government_landing.html

Check out the U.S. Federal Budget and Debt over time, in both current dollars and inflation-adjusted dollars. Also interesting if you adjust for population growth and GDP growth.

Probably most amazing is the pareto (ranked) bar chart of U.S. Federal Agency budgets. With a 20% improvement in efficiency in the four biggest agencies, you could double the budgets for the next six!

Do we have our priorities straight?

Scott Gibson
www.supportingevidence.com
'worth a thousand words'