Markets

U.S. stocks surge to all-time high

By Allan Roth

January 2, 2013 / 4:10 PM EST / MoneyWatch

Updated 4:10 p.m. ET to reflect market close:

(MoneyWatch) Investors are apparently happy any "fiscal cliff" deal was reached over the holiday. U.S. stocks closed at their all-time high today. This is measured using the Wilshire 5000 total returns, the broadest measure of U.S. stocks, including dividends.

U.S. stocks closed the day up 2.57 percent which bests the previous market high set on Sept. 14, 2012, by 0.84 percent. Current levels best the pre-crash high set on Oct. 9, 2007 by 7.83 percent. If your timing were awful and you invested $10,000 in the Vanguard Total Stock ETF (VTI) on Oct. 9, 2007, you'd have $10,740 today if you did nothing other than let dividends reinvest. That represents a gain of 7.40 percent.

If you carve out dividends and look at narrower parts of the U.S. market, the S&P 500 index is still 6.56 percent short of the record set on Oct. 9, 2007. Many in the financial services sector prefer to report on these partial returns in order to give the illusion they are beating the market.

Allan Roth

Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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