Monday's Journal tucked a small item onto B7. On Oct. 12, 1982, the Dow Jones Industrial Average finally rose above the peak it set in the bull market of the 1960s. It had taken nearly 17 years. Seventeen years is a kid going from kindergarten to a college diploma. It's also about the first half of a retirement.
The Dow sits at 51,654.95 as of Friday, Oct. 9. Its record is 54,349.12, set on Aug. 5. By our arithmetic that's about 5% under the high. The S&P 500 is closer still, at 7,811.54 against a record of 7,818.93 set on Oct. 6. The same paper visits Robinhood's Houston summit. One trader there likes going all in on a few stocks. Another, a retired pharmacist, says the trend is always “up and to the right.” Markets near a record make waiting feel like a waste.
The 1982 item is about a different feeling. Someone who bought the Dow at its mid-1960s top and held on waited through the inflation and oil shocks of the 1970s to see a new high. The paper gives the price count only. It doesn't say what dividends added over those years, so we won't either. But that's the whole point of dividends. They're the part of the return that shows up when the price doesn't.
Flat decades happen to patient people too
Nobody warned the mid-1960s buyer. The economy grew in that stretch, companies grew, and the index still went sideways for the better part of two decades. The Dow's trailing P/E is 21.03 now against 24.92 a year ago, so the market got cheaper even as it rose. That's earnings catching up with prices, which is the pleasant way for a high multiple to come down. The 1960s-to-1982 way is the other one.
Our read
This is Behavioral, with a Time Value of Money · M3 core. A long flat stretch is kind to the saver who keeps buying. It's hard on the retiree who has to sell. If your withdrawals come out of stocks in a sideways decade, you sell shares at flat prices for groceries that cost more every year. There's no new high to repair the damage. That's why the house keeps safe money in Treasury bills and floating-rate paper (SGOV in 49 books, USFR in 14). It's also why dividends matter more than they look when prices are climbing. For a buy-and-hold Dow owner, dividends were the only pay between the 1960s peak and 1982. The paper doesn't put a number on them, so neither will we.
Here's your check this week, and it takes one page of your statement. Count the years of spending you hold outside stocks, in bills, short bonds or a money market fund. Write the number down. If it's less than you'd want for a stretch like the one that ended in 1982, that's not a reason to sell anything at a record. It's a reason to pick the number on purpose, before the market picks the moment for you, and to bring it to your next review. The Dow's 1.54% yield doesn't carry a household by itself, so the cash bucket does the carrying. Fill it while the sun's out. The sky doesn't take requests.