By Sonya Dreizler via

Thanks to the recent stock market correction, the S&P 500 is now trading below its long-term inflation-adjusted trend for the first time since Apr-2017.The trendline represents the annual 6.9% “real” rate of return (including dividends) the S&P 500 has produced since 1926. Note from the chart above that stocks oscillate around this line over multi-year and even multi-decade periods. For example, the dot-com bubble put the S&P 500 more than 88% above the long-term trendline in December 1999. By contrast, the Great Financial Crisis drove the S&P 500 more than 50% below its trendline in February 2009.

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