Do the math

Drudge on the Dow:

DOW UP 40 POINTS IN PAST MONTH… UP 18% PAST 5 YEARS… UP 44% PAST 10 YEARS…

In other words, stock market investors have made, on average, 3.2 percent per annum over the last five years and 4.4 percent over the last ten. That’s presumably before inflation and also ignores the fact that one-third of the stocks that made up the Dow of 1998 are no longer part of the Dow Jones Industrial Average.

Those who think that the stock market is always the safest investment should note that simply depositing one’s money in a Euro-denominated bank account since 2003 would have returned 8.5 percent per annum in currency appreciation plus interest without any of the inherent stock-related risk.

In case you’re interested, these are the companies that were part of the Dow Jones Industrial Average in 1998 that are no longer so: Chevron Corporation, Goodyear Tire & Rubber, Union Carbide, Sears Roebuck, AT&T Corporation, Eastman Kodak, International Paper Company, Altria Group (Phillip Morris) and Honeywell International. These declining companies were replaced by healthier, more growth-friendly corporations like the American International Group, which the keen-eyed reader may note has been occasionally in the news of late….