As you can see from the chart above, the Dow has recouped the overwhelming majority of the losses incurred during the 2008-2009 stock market crash.
On September 6, the market jumped over 200 points to four-year highs, based upon the latest encouraging news regarding the European debt crisis. A week later, the Fed announced new plans for spurring domestic growth -- primarily by buying mortgage-backed securities. The intent is to boost the housing market by lowering mortgage rates even further. The result was another 200-point day on the Dow.
Exactly a week later, the Dow closed at 13,596.93 -- not only a new 52-week high, but its highest reading in almost five years. To find a higher reading, you have to go back to the fall of 2007, early in the decline following the October 9, 2007 all-time high.
The DJIA (Dow Jones Industrial Average) closed September at 13,437.13, up 2.6% for the month, and 4.3% for the quarter (see chart above. Click to expand). The dividend yield at month-end was 2.55%
The Treasury's ten-year constant maturity rate ended the month at about 1.65%.
Finally, the lack of volatility continued. The two 200-point days mentioned above were the only plus or minus 1% days in the month. The VIX, a measure of volatility, ended the month at 15.73.
Where Are We Now? September, 3rd Quarter, Year-to-date, and Recovery-To-Date Review
Here's where we stand vs. some key dates and milestones:
From All-Time High of 14,165 on Oct 9, 2007: the Dow is down 727 points (5.1%)
From Crash Low of 6547 on March 9, 2009: Up 6890 points (105.2%)
From one year ago close of 10,913 in September, 2011: the Dow is up 2524 points (23.1%)
From the 52-Week Low of 10,655 on October 3, 2011: Up 2782 points (26.1%)
Year-to-Date From 2011 close of 12,218: The Dow is up 1220 points (10.0%)
3rd Quarter: From the 2nd Quarter Close of 12,880: up 557 points (4.3%)
From Prior Month Close of 13,090.84: up 346.3 points (2.6%)
From the new 52-Week High of 13,597 set on September 20, 2012: down 159.8 points (1.2%)
Note: At the end of the crash, the Dow had lost about 54% of its value (from the all-time high). For an explanation of how it can be up over 100% since then and still be below the all-time high, see The Importance of Avoiding Large Losses.
The Next 10 Years
My stock market projection model continues to project below average 10-year returns. The "official" 2012 10-year projection as of January was for 5.6%/year for the next 10 years. As of the end of September, my interim/monthly model estimates returns closer to 5% per year.