Dow Jones vs M2 Money Supply
Since 1998, Dow Jones has shown a nominal return of +484.4%, while M2 money supply has grown by +451.9%. When adjusted for M2 money supply expansion, Dow Jones's real return is +5.9%.
Key Insights
Dow Jones has returned +484.4% nominally since 1998, but only +5.9% when adjusted for M2 money supply expansion. This means approximately 98.8% of Dow Jones's price appreciation is due to monetary expansion rather than real value growth.
Performance Summary
Period: February 2, 1998 to November 3, 2025
What This Means
Dow Jones has outperformed M2 money supply expansion, showing positive real returns. While monetary expansion has contributed to price appreciation, Dow Jones has also demonstrated real value growth.
Adjusting stock performance for M2 money supply expansion reveals how much of price appreciation is due to monetary policy versus real value growth. This perspective helps investors understand whether an asset is generating genuine wealth or simply keeping pace with money supply growth.