Bulls are celebrating the Dow Jones Industrial Average and an ETF tied to the venerable stock index breaking out to all-time nominal highs this week.
However, the picture looks different when the impact of dividends and inflation on SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) are considered.
On Tuesday, headlines trumpeted the Dow’s record close. [Dow All-Time High, S&P 500 ETF Within 2% of Record]
“But is it really?” writes says Daniel Wiener, editor of The Independent Adviser for Vanguard Investors. “In one sense, yes. We’ve never seen the Dow index close above the 14164.53 it set on Oct. 9, 2007.”
Yet when dividends are factored in, on a total return basis the Dow “has actually been setting highs regularly since 2011,” Wiener said in a note Tuesday. “When you count dividends the Dow hit a new record on Apr. 29, 2011, and then didn’t surpass that level until Jan 8, 2012. But then it was off to the races and the Dow hit 31 record highs in 2012. If it closes higher today, it will have hit 16 new closing highs so far in 2013.”