100 Year Stock Market (Dow) Chart with 25-Year Moving Average
Above is the chart introduced and analyzed in 100 years of stock market (Dow Jones) history -- with the addition of the 25-year moving average (click chart to expand). As before, it begins around 1900; it uses this past month for this year's close. It shows that the market rarely falls very far below its 25-year moving average. When this was originally posted, I noted that the one big exception to the rule was the crash that preceeded the Great Depression. Since February '09, I have been updating this graph approximately once a month.
February, Year-To-Date & Recovery-To-Date ReviewIn early March 2009, I posted Dow At 25-Year Moving Average. The Dow continued lower for several more days before bottoming at 6547 on March 9 -- very near the 25-year moving average at the time. Since then, the Dow has rallied nearly 3800 points. If we treat the February 28 close of 10325 as the 2010 close, the moving average is now at 7279. (See the chart above. Click to expand.)
Click here for April update with March, 2010 stock market results
The market was up about 260 points (2.6%) in February -- recovering most, but not all, of the January loses. Year-to-date, the Dow is down 103 points, about 1%.
In total, this bull market is now up close to 58% in a little less than 12 months. For what it's worth, the largest bear market rally following the 1929 crash lasted about 5 months, during which the Dow rose approximately 50%. Even so, it would not be a huge surprise if this ultimately turns out to be an extended bear market rally. (For a more detailed discussion of bear market rallies following the 1929 crash, see The 1929-1932 Stock Market Crash Revisited).
The Next 10 YearsMy stock market projection model currently projects 10-year returns in the neighborhood of 5.5% as of the beginning of 2010. As a result, I am expecting below average long-term returns from current levels.
Related Reading:April Update
10-Year Stock Market Projection shows how expected returns have changed over the last 10 years.
Projecting Stock Market Returns introduces the projection methodology.
Dow Yearly Returns since 1929 (bar graph)
What was the Dow rate of return for the last 5, 10, 20 years?
What has the range of returns (minimum & maximum) been for 1, 5, 10, 20-year periods?
Who's Afraid of a Sideways Market?: Interesting perspective on long flat periods from Morningstar.
Three Scenarios for the Economy (and the Stock Market): business as usual, headwinds, and snowball scenarios.
For a list of other popular posts, see the sidebar on the left.
Data and ComputationsFor those who would like to perform additional analysis, my Dow Jones yearly closing data and the associated calculations are in this spreadsheet. The spreadsheet will automatically calculate the Dow's growth rate between any two years you input (e.g., average stock market return between 1982 and 1999, excluding dividends). Note: if you have trouble downloading the Excel spreadsheet, see this post.
Note2: the spreadsheet also contains the earnings data and calculations used in the Worst-Case Scenario post.
Share This Article
Bookmark this on Delicious
To share via Facebook, Twitter, etc., see the "Share" option in the Menu Bar or in the Google Toolbar.
This work is licensed under a Creative Commons Attribution 3.0 unported license.
Last modified: 4/5/2010