As we predicted early last week, everyone is talking about gas prices today.
It’s the how new meme: Will gas prices be the thing that suffocates this economy?
We’ll pass on making a guess.
But we thought it’d be a good time to update one of our favourite charts: The S&P 500 divided by the cost of an average gallon of gasoline.
It’s kind of beautiful.
From the early ’90s until the late ’90s, the stock market steadily outstripped gas prices.
Since then it’s been basically been the reverse, so that one “share” of the S&P 500 today gets you the same number of gallons of gas as you got in the early 90s.
It’s a depressing trend.
You’d like to see stocks (which represent human value creation) grow at a faster clip than a commodity, which just sits there.
For the average person, it means their investments aren’t growing faster than a basic cost they see every day.
And for a little more perspective, here’s the same chart alongside the price of a gallon of gas — blue dotted line — just so you can see the trend of gasoline prices over the last couple of decades.
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