In Box: Feedback, Comments, Dialogue Click here to send us your comments. November 13, 2002 - Laurence B. Siegel Stock Prices Post-1929    I'd like to clarify one point regarding stock prices after 1929. Your statement (in "Only At the Right Price") that the 1929 stock market high "was not regained after the crash until 1945" is true if you're referring to total stock market return -- which includes reinvestment of dividends. In other words, a $100 investment at the 1929 peak was worth $100 again in 1945, if all stock dividends received were reinvested in stocks.    However, the index price level itself at the 1929 high wasn't reached again after the crash until 1954! Leaving dividends aside, $100 in market value at the 1929 peak was still worth only $100 twenty-five years later.    Of perhaps greater importance was the "real" total return for the period (that is, after adjustment for inflation or deflation), since there was substantial deflation in the 1930s. In real terms, an investor who reinvested dividends would have seen a 1929 investment regain its value in 1937 and then again, after another dip, in 1945. Another way to say it is that the real wealth (or purchasing power) of an investor in an S&P index fund (had one existed at the time) would have been roughly the same at the peak in 1929, at the next peak in 1937, and then again in 1945. After that it would have grown steadily.    Laurence B. Siegel Back to In Box

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