Tag Archives: buying shares

The Meaning of the New Highs in the S&P500

The S&P500 has recently been hitting new all-time highs, which would seem to suggest that the economy is recovering and that the U.S. economy is back on track.  The story does not look quite so rosy when you account for inflation, as Mark Hulbert has recently noted.  The current level of the S&P500 is, in fact, still about 24% below its high in 2000 once inflation is considered.  Economists and finance people would say that, measured in real terms, the S&P500 is 24% lower than it was at its 2000 peak.  What this means is that the proceeds from the sale of a share of an S&P500 index fund purchases considerably less in real goods today than it did thirteen years ago.  Continue reading