When I was a Kid, I Remember a Gallon of Regular Gas Cost…

What do you remember? Have prices really changed that much?

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When I was a kid, I remember that in 1979 a gallon of regular gas cost $0.86. Jimmy Carter was the President of the United States, a first-class stamp cost $0.15, life expectancy was 73.9 years, and the Dow Jones hit a high of 907 that year.

907? Really, is that all? The same Dow-Jones Industrial Average that just set a new all-time high around 14,500? Maybe this was just a really great 35 year period of time to invest. Maybe there were no significant world events to cause a set-back – or were there? What about the first Chrysler bailout, 3-Mile Island, President Reagan being shot, the Cold War, the 1987 Stock Market Crash, 9/11, or the Lehman Brothers bankruptcy?

Old TV

Maybe your memories go back a bit farther to 1946, when the first of the ‘baby boomers’ were born. The average house cost $12,500, gas was $0.15 a gallon, Harry Truman was the President of the United States, Du Mont Televisions were popular, a first-class stamp cost $0.03, life expectancy was 66.7 years, and the Dow Jones hit a high of 212 that year.

And in spite of the Korean and Vietnam Wars, the assassination of President Kennedy, and Watergate (to name a few events), the Dow Jones also rose during the 33 year period from 1946-1979.

So what is the point of this walk down memory lane?

  1. Cost will continue to rise over time.
  2. Investing in stocks (as evidenced by the Dow Jones) would have allowed you to keep pace with inflation AND grow your money, in spite of all the negative world events. Stock investments tend to increase over time because of great companies. Great companies plan for the future, and then adjust their plans based on what actually happens.

Sources: www.1970sflashback.com, www.tvhistory.tv, www.thecostofliving.com, www.infoplease.com

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