The Dow has been flat for 7 years. Take a look at this chart (click it), it shows that the Dow, adjusted for inflation, hasn’t budged an inch in 7 years!

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On October 30, 2000 the Dow closed at 10,817. Yesterday, the Dow closed 13,792. You’d think you have a 3000 point gain but that’s deceptive because inflation isn’t factored into the numbers.

Let’s assume 3.5% annual inflation over 7 years (84 months) so when we take 10,817 and adjusted for inflation, it should be at…….13,815!

Yup, you’re reading that right. Over the last 7 years, the Dow has simply adjusted for inflation! It hasn’t moved up in value one bit!

You might have taken the Dow’s gain between the seven years (3000 points) and divided that by the original (10,817) to come up with 27% “return” over the seven years but that doesn’t include or adjust for inflation. Take 27% and divide that by 7 and you get 3.8 pct per year which isn’t adjusted for inflation!

I’m not even going to do the math for the S&P and Nasdaq because those numbers are much uglier! Just look at the graph!

The Fed may lower interest rates later today and the Dow may “rally” but, you guessed it, those “rallies” are doing nothing more than adjusting for inflation.

Keep this in mind and consider ways to make 20% or more per year with your investments to keep ahead ;) .