(Georgia Institute of Technology, 2011-06)
Mulford, Charles W.; Jayaraman, Narayanan
Following the market swoon of 2008 and 2009, equity prices have enjoyed a significant rebound. Investors are understandably interested in where stocks are headed next. An interesting long-term perspective on the subject can be gained by examining the extent to which Nominal Gross Domestic Product has explained the movement of share prices, in particular, the Dow Jones Industrial Average, over time. In this report, we look at the relationship between the two metrics since 1916, updated with data through the fourth quarter, 2010. Barring any unforeseen shocks, we find strong historical precedent for the Dow to be trading in the vicinity of 15,000 in 2011.
(Georgia Institute of Technology, 2007-08)
Mulford, Charles W.; Jayaraman, Narayanan
With recent market volatility, investors are understandably concerned about where blue-chip
stocks are headed next. An interesting long-term perspective on the subject can be gained by
examining the extent to which Nominal Gross Domestic Product has explained the movement
of share prices, in particular, the Dow Jones Industrial Average, over time. In this report, we
look at the relationship between the two metrics since 1916, updated with data through the
second quarter, 2007. We find strong support for the Dow to be trading in the vicinity of
13,700 to 14,000.
The authors appreciate the assistance provided by HyungSuk Choi.
(Georgia Institute of Technology, 2004-12)
Mulford, Charles W.; Ely, Michael L.; Maloney, Kerianne; Martins, Mario; Quiroz, Raul; Jayaraman, Narayanan
With the Dow Jones Industrial Average once again trading above 10,000, investors understandably are wondering where the blue chips are headed next. An interesting long-term perspective on the subject can be gained by examining the extent to which Nominal Gross Domestic Product has explained the movement of share prices over time.