How Have The Markets Done After Inflation Since The End of WWII?

Earlier this weekend, one of the readers of this site asked me to break down the inflation-adjusted returns of the DJIA (Dow Jones Industrial Average), S+P 500 and NASDAQ since the end of World War II.

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Let's start with the DJIA.

From 1946-2009 (64 years), the Dow Jones Industrial Average has increased by an average of 7.68% per year.

However, after accounting for inflation, this return dips to just 3.69%.

Here is a full list of the data between 1946 and 2009:

Year, Return, Inflation Adjusted Return

1946, -8.14%, -16.47%
1947, 2.23%, -12.13%
1948, -2.13%, -10.2%
1949, 13.1%, 14.34%
1950, 17.4%, 16.14%
1951, 14.36%, 6.48%
1952, 8.42%, 6.5%
1953, -3.77%, -4.52%
1954, 43.96%, 43.21%
1955, 20.77%, 21.14%
1956, 2.27%, 0.78%
1957, -12.77%, -16.08%
1958, 33.96%, 31.11%
1959, 16.4%, 15.71%
1960, -9.34%, -11.06%
1961, 18.71%, 17.7%
1962, -10.81%, -11.81%
1963, 17%, 15.68%
1964, 14.57%, 13.26%
1965, 10.88%, 9.27%
1966, -18.94%, -21.8%
1967, 15.2%, 12.11%
1968, 4.27%, 0.08%
1969, -15.19%, -20.65%
1970, 4.82%, -0.9%
1971, 6.11%, 1.73%
1972, 14.58%, 11.37%
1973, -16.58%, -22.8%
1974, -27.57%, -38.61%
1975, 38.32%, 29.19%
1976, 17.86%, 12.1%
1977, -17.27%, -23.77%
1978, -3.15%, -10.74%
1979, 4.19%, -7.16%
1980, 14.93%, 1.43%
1981, -9.23%, -19.55%
1982, 19.6%, 13.44%
1983, 20.27%, 17.06%
1984, -3.74%, -8.06%
1985, 27.66%, 24.1%
1986, 22.58%, 20.72%
1987, 2.26%, -1.39%
1988, 11.85%, 7.71%
1989, 26.96%, 22.14%
1990, -4.34%, -9.74%
1991, 20.32%, 16.11%
1992, 4.17%, 1.16%
1993, 13.72%, 10.73%
1994, 2.14%, -0.42%
1995, 33.45%, 30.62%
1996, 26.01%, 23.06%
1997, 22.64%, 20.35%
1998, 16.1%, 14.54%
1999, 25.22%, 23.01%
2000, -6.17%, -9.53%
2001, -7.1%, -9.95%
2002, -16.76%, -18.34%
2003, 25.32%, 23.04%
2004, 3.15%, 0.49%
2005, -0.61%, -4%
2006, 16.29%, 13.06%
2007, 6.43%, 3.58%
2008, -33.84%, -37.68%
2009, 18.82%, 19.17%

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Next up - the NASDAQ. We started in 1972, which was when the NASDAQ traded for an entire year for the first time.

From 1972 to 2009, the NASDAQ has increased by an average of 11.76% per year.

After adjusting for inflation, this number dips to 7.24%.

Here is the year-by-year data:

Year, Return, Inflation Adjusted Return

1972, 17.18%, 13.97%
1973, -31.06%, -37.28%
1974, -35.11%, -46.15%
1975, 29.76%, 20.63%
1976, 26.1%, 20.34%
1977, 7.33%, 0.83%
1978, 12.31%, 4.72%
1979, 28.11%, 16.76%
1980, 33.88%, 20.38%
1981, -3.21%, -13.53%
1982, 18.67%, 12.51%
1983, 19.87%, 16.66%
1984, -11.31%, -15.63%
1985, 31.49%, 27.93%
1986, 7.36%, 5.5%
1987, -5.25%, -8.9%
1988, 15.4%, 11.26%
1989, 19.24%, 14.42%
1990, -17.81%, -23.21%
1991, 56.86%, 52.65%
1992, 15.45%, 12.44%
1993, 14.75%, 11.76%
1994, -3.2%, -5.76%
1995, 39.92%, 37.09%
1996, 22.71%, 19.76%
1997, 21.64%, 19.35%
1998, 39.63%, 38.07%
1999, 85.59%, 83.38%
2000, -39.29%, -42.65%
2001, -21.05%, -23.9%
2002, -31.53%, -33.11%
2003, 50.01%, 47.73%
2004, 8.59%, 5.93%
2005, 1.37%, -2.02%
2006, 9.52%, 6.29%
2007, 9.81%, 6.96%
2008, -40.54%, -44.38%
2009, 43.89%, 44.24%

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Lastly, the S&P 500.

Starting from 1951 (again, the first full year of data) and going until 2009, the S&P 500 has increased by an average of 8.47% per year.

The inflation adjusted return? 4.66%.

Here is the year-by-year data:

Year, Return, Inflation Adjusted Return

1951, 16.35%, 8.47%
1952, 11.78%, 9.86%
1953, -6.62%, -7.37%
1954, 45.02%, 44.27%
1955, 26.4%, 26.77%
1956, 2.62%, 1.13%
1957, -14.31%, -17.62%
1958, 38.06%, 35.21%
1959, 8.48%, 7.79%
1960, -2.97%, -4.69%
1961, 23.13%, 22.12%
1962, -11.81%, -12.81%
1963, 18.89%, 17.57%
1964, 12.97%, 11.66%
1965, 9.06%, 7.45%
1966, -13.09%, -15.95%
1967, 20.09%, 17%
1968, 7.66%, 3.47%
1969, -11.36%, -16.82%
1970, 0.1%, -5.62%
1971, 10.79%, 6.41%
1972, 15.63%, 12.42%
1973, -17.37%, -23.59%
1974, -29.72%, -40.76%
1975, 31.55%, 22.42%
1976, 19.15%, 13.39%
1977, -11.5%, -18%
1978, 1.06%, -6.53%
1979, 12.31%, 0.96%
1980, 25.77%, 12.27%
1981, -9.73%, -20.05%
1982, 14.76%, 8.6%
1983, 17.27%, 14.06%
1984, 1.4%, -2.92%
1985, 26.33%, 22.77%
1986, 14.62%, 12.76%
1987, 2.03%, -1.62%
1988, 12.4%, 8.26%
1989, 27.25%, 22.43%
1990, -6.56%, -11.96%
1991, 26.31%, 22.1%
1992, 4.46%, 1.45%
1993, 7.06%, 4.07%
1994, -1.54%, -4.1%
1995, 34.11%, 31.28%
1996, 20.26%, 17.31%
1997, 31.01%, 28.72%
1998, 26.67%, 25.11%
1999, 19.53%, 17.32%
2000, -10.14%, -13.5%
2001, -13.04%, -15.89%
2002, -23.37%, -24.95%
2003, 26.38%, 24.1%
2004, 8.99%, 6.33%
2005, 3%, -0.39%
2006, 13.62%, 10.39%
2007, 3.53%, 0.68%
2008, -38.49%, -42.33%
2009, 23.45%, 23.8%