Inflation-Adjusted S&P500 Chart

As market participants we look at charts every day for a variety of reasons. But whether we're doing so for idea generation, risk management or entry/exit points, we're charting to go out there and try to make money. Other times, however, looking at longer-term charts just helps to put things in perspective. With the day-to-day noise out there coming from the government, media and investing public, sometimes it's important to bring in a longer-term view to supplement our short-term outlook.

Here is a chart of the S&P500 adjusted for inflation using the Consumer Price Index, which is released monthly by the Bureau of Labor Statistics. What still stands out to me is the consistency of the lower lows and lower highs since the year 2000. Hardly the uptrend and bull market that we hear about so often:

You rarely see a chart like this because the "all-time high" headlines are so much sexier. No one likes to add the, "But in real terms we're still far from it". Who wants to buy a newspaper that says that? I know I wouldn't. But fortunately I'm not in that business and I can share with you guys any chart I want. And I think it's important that when I speak with investors, they understand how in Real terms, not only is the S&P500 not at all-time highs, but actually down 20% over the last 13.5 years. It's all about purchasing power isn't it? Or in this case, the lack there of?

Source:

S&P500 Composite: Monthly From 1871 (TheChartStore)

Tags: $SPY $SPX $ES_F