Here’s a total return version of chart duo I posted earlier today.
The first chart is an overlay of total returns (dividends reinvested) for the two periods. Since stocks paid much higher dividends during the earlier period, the performance of the 1968-1982 is dramatically superior to the returns we’ve seen since the market peak in 2000.
After we adjust both for inflation (using the BLS Consumer Price Index) the apparent dividend advantage of the earlier period gradually evaporates.
Of course, the timeframes illustrated in these charts are radically different from one another in many ways — inflation rates, dividend yields, federal debt, average GDP, among them. When future historian compare these two periods, they will probably point to the demographic shift from young Boomers in the early phases of their careers to ageing Boomers on the threshold of retirement with a growing sense of their financial vulnerability.
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