Stock Market History Chart Last 100 Years Reveals Surprising Trends

Looking at the stock market history chart over the last 100 years reveals some surprising trends. The Dow Jones Industrial Average has seen a remarkable growth, increasing from around 60 points in 1920 to over 28,000 points in 2020.

One of the most notable trends is the significant impact of World War II on the market. The war effort led to a massive increase in government spending, which boosted the economy and the stock market.

The post-war period saw a sustained period of economic growth, with the Dow Jones averaging around 10% annual returns from 1946 to 1966. This period is often referred to as the "Golden Age" of the stock market.

The 1970s and 1980s were marked by high inflation and interest rates, which had a negative impact on the market. The Dow Jones actually declined by around 45% during this period.

The Dow Jones Industrials Index has risen 10-fold between 1932 and 1966. This incredible growth is a testament to the resilience of the stock market.

One notable phase in the Dow Jones 100-year chart is the period between 1966 and 1984, where the index corrected and traded sideways for two decades. Buying in 1966 would have been a bad decision, as the Dow was trading in the upper area of its long-term channel.

The Dow Jones has traded in a wide range between 2000 and 2013, but a triple top breakout took place in 2013, which is argued to be the moment when the stock bull market started.

Here are the 5 distinct phases visible on the 100-year Dow Jones chart:

Stock market crashes and bear markets are two distinct phenomena that can have a significant impact on investors. A stock market crash is a quick and brief decline in stock prices, whereas a bear market is a slow and prolonged decline.

The difference between the two is not just a matter of semantics, but also of timing and duration. A crash can happen in a matter of days or weeks, while a bear market can drag on for months or even years.

Stock market crashes are often associated with significant economic downturns, such as the 1929 stock market crash that led to the Great Depression. Bear markets, on the other hand, can be caused by a variety of factors, including economic recessions, inflation, or even a decline in investor sentiment.

The list below highlights some notable stock market crashes and bear markets:

The Dow Jones 100-year chart reveals five distinct phases in its history. The first phase, from 1932 to 1966, saw the Dow Jones index rise 10-fold.

During this time, investors who bought in 1966 would have experienced a catastrophic loss, as the Dow was trading in the upper area of its long-term channel. The Dow then corrected and traded sideways for two decades, testing support levels multiple times.

In 1984, the Dow began a nearly straight-line ascent that lasted until the year 2000. This phase was marked by a significant increase in the index's value.

Between 2000 and 2013, the Dow traded in a wide range, indicating a period of volatility. A triple top breakout occurred in 2013, which some argue marked the start of the stock bull market, not March 2009.

The Dow Jones Industrials Index is currently trading in its upper band of its long-term rising channel, a position it has held since the last update of this article in mid-2024. This has not happened before in history, and it may signal a structural change in the stock market, potentially leading to above-average inflation or even hyperinflation.

Here are the five distinct phases of the Dow Jones 100-year chart:

Looking at the stock market history chart over the last 100 years, several key indicators stand out.

The Great Depression of the 1930s saw stock prices plummet, with the S&P 500 dropping to around 1 in 1932.

A major shift occurred in the 1980s with the introduction of the personal computer and the rise of the tech industry.

The market experienced a significant correction in 1987, with the S&P 500 falling by over 20% in a single day.

Despite this, the 1990s saw a remarkable bull run, with the S&P 500 more than doubling in value.

A secular turning point in the market is a significant event that can have lasting effects on the economy.

The Dow Jones historical chart on 100 years shows resistance around 38-39k points, which could trigger a pullback.

Investors are wondering when markets will turn down decisively and start a multi-year bearish trend.

This resistance point is not necessarily a secular bearish turning point, similar to the ones in 2000 or 1929, which resulted in multi-year bear markets.

The big secular turning point is predicted to occur late this decade, between 2027 and 2028.

Between now and then, there will be pullbacks and rallies, but no secular bearish turning point, according to cycle analysis.

The stock market and the overall economy are closely intertwined, and one key indicator that reflects this relationship is the ratio of the stock market to GDP. The S&P 500, a capitalization-weighted Index, captures approximately 80% of the available total market capitalization, making it a representative measure of the entire stock market.

In fact, intuitively, the stock market and the overall economy should grow at a similar pace, as the stock market is a reflection of the economy's overall health. This is why the S&P 500 to GDP ratio is a useful indicator of the stock market's valuation relative to the economy.

The S&P 500 to GDP ratio has a long history, with some calculations dating back to 1790. This provides a unique perspective on the stock market's valuation over time, allowing us to see how it has changed relative to the economy.

Here's a brief comparison of the S&P 500 to GDP ratio with the Wilshire 5000 to GDP ratio: