By phony you mean does not conform to the view you have bought into.
Let's look at the Nasdaq. On March 10, 2000, the index finally peaked at an intra-day high of 5,132.52. The index declined to half its value within a year, and finally hit the bottom of the bear market trend on October 10, 2002, with an intra-day low of 1,108.49. Note -- down 80% in 2.5 years!
It is now just under 4,000. Still down over 20% since its 2000 high.
How about the S&P 500?
The S&P 500, Dow and Nasdaq Since Their 2000 Highs
By Doug Short
November 5, 2013
Here is a update in response to a standing request from David England, a retired professor now actively educating investors through his Trader's Eye website. In his presentations, he likes to disprove the standard message of Wall Street, "Don't worry! The market will always come back." I furnished David with some charts, and I now share them with regular visitors to my Advisor Perspectives pages.
Specifically, David had asked for real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite. So I created two overlays — one with the nominal price, excluding dividends, and the other with the price adjusted for inflation based on the Consumer Price Index for Urban Consumers (which I usually just refer to as the CPI). The charts below have been updated through the end of October.
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The charts require little explanation. So far the 21st Century has not been especially kind to equity investors. Yes, markets usually do bounce back, but often in time frames that defy optimistic expectations.
The charts above are based on price only. But what about dividends? Would the inclusion of dividends make a significant difference? I'll close this post with a reprint of my latest chart update of the S&P 500 total return on a $1,000 investment at the 2000 high.
Total return, including reinvested dividends, certainly looks better, but the real (inflation-adjusted) purchasing power of that $1,000 is currently, over 13 years later, is only 83 dollars above break-even