Sunday, April 15, 2012

Housing vs. Stock Market Growth Revisited

Devising a way to make a simple, fair, high-level comparison between housing and stock investments is more difficult that you might think. This post is my second attempt to develop such a comparison.

U.S. Housing vs. Stock Market Price Growth

DJIA (Dow Index) growth vs U.S. residential real estate / housing growth since 1900
U.S. Housing vs. Stock Market Appreciation

In the above graph (click to expand) the blue line shows Shiller's nominal home price index, treating 1900 as 100. As a reminder, Shiller's methodology attempts to track the price of a home of constant size and quality; it adjusts out the upward price drift caused by the average home becoming larger and more feature-rich over time. The red line represents yearly closing prices of the Dow Jones Industrial Average (DJIA) -- again treating 1900 as 100.

In both cases, we're using nominal, "then current," dollars -- i.e., I have not adjusted for inflation. In both

Sunday, April 1, 2012

March 2012 Stock Market Update

Stock market (DJIA) monthly performance / closing prices for last 12 months
Dow Index Monthly Closes Through March, 2012

Dow Approaching All-Time High

Well, maybe I'm a touch premature, but consider this.... the Dow set another 52-week and multi-year high on March 15. To top this high, you'd have to go all the way back to 2007 -- back to early in the descent from the all-time peak established on October 9 of that year. That shows you how far we have come in the three short years since the market bottomed in March of 2009. The Dow has more than doubled since its lows of 2009, and is now