Look at these two graphs from Google Finance.
They tell a very interesting story.
The first graph shows that from 1970-1980, the Dow was far below 2000. Today we cringe when it nears 7000. We had mild growth in the 1980’s (to about 4000), but after 1992 (second graph) it hit almost 12000 at the end of 99. After 9/11 the stock market dropped to 8000 up until 2004 when it went above back 10000. In 2006, the Dow took another huge leap to almost 14000 in 2007.
Today the Dow sits at 7331.18 (2/23/09). Just one year ago, it was DOUBLE the amount. We have lost approxamtely 13 years of growth only 6 months.
If you look at the Dow from 1970-1990, it shows America survived without huge gains from the stock market. Millions of Americans purchased homes from 1970-1990. Today, many of those same homeowners are losing their homes. Sure many have benefitted in the past 13 years, but how much of that value is still in the hands of the peoeple?
There is no data specifically linking the Dow with foreclosures, this is merely a hypothesis.
Filed under: Stock Market |