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. In an age of instant info and wild market fluctuations, we thought it might be interesting to look at the long term performance of a few of the major market indexes, as well as some averages & projections based on that performance. In that light, in this and coming issues, we'll be looking at some longer-term performance & trends of the Dow, the NASDQ, the NYSE, and the S&P 500. Viewing the Charts: The charts were all compiled with Microsoft Excel from weekly market data for the specified periods. The charts which appear on this, the main Visual Market page, are not the best quality. We couldn't use the Excel charts themselves, which assumes every viewer would have MS Office loaded on his or her computer, so we had to make some sacrifices in order to have the page download more quickly. On the other hand, for any fuzzy chart, you can simply click on it for the larger version [best viewed at 800x600 or better] ... or simply right-click on it and choose "Save Target As." From there, you simply pick a folder on your computer where you'd like to save it. The Dow: 1930 - Present This month's offering provides a chart of the weekly Dow Jones Industrial Average over the period from just after the onset of the Great Depression [week of 06 JAN 1930] up to the present [week of 18 SEP 2000]. In addition to a plot of the weekly close, we also included a moving average [5-year] and an Exponential Growth Curve, projected forward one year.
Highlights: {All figures for
closings above or below marks are weekly, not daily.} Highs & Lows: While a figure of 248.7 might seem like a wide one-day swing of the Dow these days, in this context, it is the Dow total for January 6th, 1930, the beginning date for these numbers. That's roughly 2.3% of its current value of 10,847.37 for the weekly closing ending 18-SEP-2000. The Dow reached its lowest weekly close during the week of 4-JUL-1932, when it fell to 41.6. It reached its highest weekly close of 11723 the week of 10-JAN-2000. Rate of Return: These days, understandably, we expect the Rate of Return for equity investments to meet or exceed bonds. In this long-term context, the Rate of Return for the Dow averaged 5.33%, compounded weekly ... or an Annual Rate of approx. 5.462% ... below the level at which current bond prices have fluctuated. Median Average: The Median Average for the Dow over the period is 1404.85. During the weeks between 1930 and the present, it has closed above this average on 776 weeks and below this average on 2912 weeks [3.76:1]. It first closed above this threshold the week of 4-NOV-1985, part of an up-swing that began with something of a false start in Q3 of 1982 [see Moving Avg., below], then flattened and even dipped in 1984. But from NOV-85 until the crash in '87, the market rocketed to a high of 2709.5 the week of 17-AUG-87, an increase of over 90% in about 7 quarters. By October, it had fallen to 1950.8, a loss of roughly 28%. Just after Thanksgiving that year, it was down to its lowest weekly post-crash close of 1766.7, representing a loss of 34.8% from its August high. It wasn't until two years later, in August 1989, that the Dow made it back to its previous high. Exponential Growth Curve: An exponential growth curve with a 1-year Forward Projection was plotted for the series. In general, the Dow floated above this growth curve from 1953 through roughly Q2 1969, more than 13 years. For the next three years, it flirted with the curve, rising slightly above or below, with a significant dip below it throughout most of 1970. From there until Q4 1972, the Dow once again rode the curve. But by Q1 1973, it fell below the curve and remained there. There was a significant dip in the 2nd half of 1974, after which the Dow was relatively flat through Q3 1982 [see Median Avg., above]. The Dow climbed fairly steadily toward the curve from that point until a sharp spike began in Q4 1986 which brought it above the curve in Q1 1987, the first time since Q4 1972, more than 14 years. The spike continued through Q1 & Q2 and into Q3 until the 1987 crash. It touched the curve again in Q2 1989 and looked like it might stay near or above it until July 1990, when it approached the 3000 mark at 2980.2. From there, a dip brought the Dow back down to 2398 in October, a loss of nearly 20%. The recovery was almost immediate and the Dow once again climbed above the curve in Q1 1991. By June 1991, it had recovered the loss, closing above 3000. After a slight dip at the end of 1991, the Dow once again climbed above the curve, touched it again in October 1992, and has remained above the Growth Curve since, dramatically so since Q1 1994.. The 1-year Forward Projection places the Dow at 5340.9 for September of 2001. The Dow first closed above the Forward Projection the week of 29-JAN-1996. It has closed above this projection point 243 weeks; it has closed below this 3444 weeks [14.17:1]. Moving Average: A 5-year Moving Average was plotted. The Dow has remained above the 5-year Moving Average since approx. Q3 1982. The current Moving Average of the Dow places it at just under 8400. It first closed above this threshold the week of 16-FEB-1998. It has closed above this point 129 weeks; it has closed below this point 3559 weeks [27.56:1]. Of course, most of this info is more of an historical curiosity than anything else. ******* ******* . |
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