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History of the Dow
Dow Return Rate / Retail & Food Services Sales Growth Rate
1/50          1/1960            1/1970            1/1980           1/1990             1/2000            1/2010            1/20
The 12 month Dow Industrial Average Return Rate, is shown in gray. The rate is based on the DJIA
monthly close, excluding dividends. DJIA refers to the Dow Jones Industrial Average. The annual US
National Retail & Food Services Sales Growth Rate is plotted monthly in green. Other two-data-series
graphs are available. See links at the bottom of each page.
Dow Return Rate vs. Retail & Food Services Sales Growth Rate
 
DJIA Return Rate
Simultaneous Change
DJIA Return Rate
Subsequent Change
1% Rise in 1 Yr Retail & Food Sales Growth Rate
+1.49%
-0.64%
1% Fall in 1 Yr Retail & Food Sales Growth Rate
-1.26%
+1.07%
What does the table mean?
It indicates that a 1% Retail & Food Services Sales Growth Rate increase over a 12
month period, (from 5% to 6% for example) has typically been accompanied by a
1.49% Dow Industrial Average Return Rate increase during that year and a 0.64%
Dow Industrial Average Return Rate decline the following year.

It also indicates that a 1% Retail & Food Services Sales Growth Rate decline over a
12 month period, (from 5% to 4% for example) has typically been accompanied by a
1.26% Dow Industrial Average Return Rate decline during that year and a 1.07% Dow
Industrial Average Return Rate increase the following year.

The center column shows the change in the Dow Industrial Average Return Rate over
12 months, depending on whether the period experienced a rising or falling Retail &
Food Services Sales Growth Rate. The right column shows the change in the Dow
Industrial Average Return Rate during the year following an increase or decrease in
the Retail & Food Services Sales Growth Rate.

The data history in the middle column shows a strong tendency for the two
rates to move in the same direction during the same time period.

The evidence for using the previous 12 month change in the Retail & Food
Services Sales Growth Rate to predict the future direction of the Dow
Industrial Average Return Rate is strong (right column). However, the
direction of the rates are inversely related to each other. A change in the
Retail & Food Services Sales Growth Rate suggests that the Dow Industrial
Average Return Rate will move in the opposite direction of the Retail & Food
Services Sales Growth Rate.

Annual rates are shown in the graph and calculations.



How Do I Use This Information?
There are many investment theories that are well publicized in the financial press.
Even though little or no historical data may be offered as evidence for such theories,
many investors use them subconsciously, if not intentionally.

Example Theories: Rising Inflation is bad for the stock market. A booming housing
market is good for the S&P 500 stock index. A falling fed funds rate means that long
term interest rates will fall.

There are many such theories. In this site,  long term investment and economic data
is tested against decades to determine whether a relationship actually exists or not.
This historical correlation provides a vital aid in interpreting the often confusing
behavior of the financial markets. The perspective gained may be the difference
between staying the course or being blown and tossed by every investment theory
that is popular at the moment. What the majority assumes to be true, often is not. In
the final analysis, readers are admonished to follow the evidence, wherever it leads.

This page tests the relationship between the Retail & Food Services Sales Growth
Rate and the Dow Industrial Average Return Rate. Suppose you are making a
business or investment decision. Suppose again that the decision hinges on whether
the Retail & Food Services Sales Growth Rate and the Dow Industrial Average Return
Rate tend to move in the same or opposite directions. The data, graphs, and analysis
above will enlighten you as to the History of the Dow on a rate of return basis. You'll
discover whether they move with, inversely to, or independently of each other.

Suppose that the Retail & Food Services Sales Growth Rate has risen sharply and
that you need to know what direction the Dow Industrial Average Return Rate is
headed in the near future. Does the recent increase in the Retail & Food Services
Sales Growth Rate provide a clue about the future direction of the Dow Industrial
Average Return Rate? The data history, graph, and analysis above will show you how
the Dow Industrial Average Return Rate has performed after increases in the Retail &
Food Services Sales Growth Rate. You'll see if one indicator has been likely to signal
a change in another. This is not intended as a prediction, but merely as a clue to the
future from the annals of history. No man knows the future, unless he has the ability
to control the future.

This site compares data series for interest rates, stock indexes, economic indicators,
currency exchange rates and real estate values. Suppose that you want to see how
stock indexes are influenced by interest rates or the value of the dollar. Click one of
the stock index links on the right side of any page. Links to our multi-series graphs
and correlation analysis may be found at the bottom-center of the stock index pages.


Formula for periods with a rising Retail & Food Services Sales Growth Rate:
1) Change in the Dow Industrial Average Return Rate DURING periods with a rising
Retail & Food Services Sales Growth Rate:
The abbreviated formula is: (Dow Industrial Average Return Rate Change / Retail &
Food Services Sales Growth Rate Rise) x 1% = Published Rate.

The complete formula is: [(Average change in the Dow Industrial Average Return
Rate over all rolling 12 month periods with a rising Retail & Food Services Sales
Growth Rate) / (Average Rise in the Retail & Food Services Sales Growth Rate over
the same 12 month periods)] x 1% = Published Rate.

2) Change in the Dow Industrial Average Return Rate AFTER a rising Retail & Food
Services Sales Growth Rate:
The abbreviated formula is: (Subsequent Dow Industrial Average Return Rate
Change / Retail & Food Services Sales Growth Rate Rise) x 1% = Published Rate.

The complete formula is: [(Average change in the Dow Industrial Average Return
Rate during the 12 months following any rolling 12 month base period with a rising
Retail & Food Services Sales Growth Rate) / (Average Rise in the Retail & Food
Services Sales Growth Rate over the 12 month base periods)] x 1% = Published Rate.


Formula: Periods with declining Retail & Food Services Sales Growth Rate:
1) Change in the Dow Industrial Average Return Rate DURING periods with a
declining Retail & Food Services Sales Growth Rate:
The abbreviated formula is: (Dow Industrial Average Return Rate Change / Retail &
Food Services Sales Growth Rate Decline) x -1% = Published Rate.

The complete formula is: [(Average change in the Dow Industrial Average Return
Rate over all rolling 12 month periods with a declining Retail & Food Services Sales
Growth Rate) / (Average decline in the Retail & Food Services Sales Growth Rate
over the same 12 month periods)] x -1% = Published Rate.

2) Change in the Dow Industrial Average Return Rate AFTER a decreasing Retail &
Food Services Sales Growth Rate:
The abbreviated formula is: (Subsequent Dow Industrial Average Return Rate
Change / Retail & Food Services Sales Growth Rate Decrease) x -1% = Published
Rate.

The complete formula is: [(Average change in the Dow Industrial Average Return
Rate during the 12 months following any rolling 12 month base period with a declining
Retail & Food Services Sales Growth Rate) / (Average decline in the Retail & Food
Services Sales Growth Rate over the 12 month base periods)] x -1% = Published
Rate.


Rolling 12 Month Periods Defined:
Overlapping 12 month periods in a monthly data base.

For example:
In the 24 month period included in 2000 - 2001, there are 13 complete rolling 12
month periods. The first is January, 2000 - December, 2000. The second is February,
2000 - January, 2001. The third is March, 2000 - February, 2001 and so on. The last
complete rolling 12 month period in the 2000 - 2001 period is January, 2001 -
December, 2001.
-40%
40%
30%
20%
10%
0%
-10%
-20%
-30%
14000
10000
8000
6000
4000
2000
0
12000
The Dow Jones Industrial Average, is shown above in gray and is measured using the left axis.
US Retail & Food Services Sales are shown in black, measured in billions of dollars (right axis).
Dow Jones Industrial Average
Retail & Food Services Sales
700
500
400
300
200
100
0
600
Multi-Index Chart
1/2000        1/2002               1/2004               1/2006               1/2008               1/2010           1/2012
TwinCharts.com
More Multi-Index Charts
To see the Dow Jones Industrial Average on a chart with many other indexes like the
Gross National Product, Oil Prices or Unemployment Rates, click
Dow Jones Indicators.
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