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Chart Review Mondays

Chart Review Mondays

November 18, 2021
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I love good charts. Good charts can develop our understanding about the world like few things can. I’ve always appreciated the statistics courses I’ve taken, because of how they prepared me to think about the world.

So on “Chart Review Mondays”, I’m going to discuss specific charts, how we can glean insights, and how we can put those insights to work.

Today’s charts are from JPMorgan’s Guide to the Market. This is the most valuable finance resource I’ve found to date. The first chart is the S&P 500 Price Index. While many people have an idea of how the stock market has performed in recent years, this chart shows how quickly and how much stocks have grown in price. I’ll return to this chart in coming weeks, but today, I want to tie it to the next two charts.

While the above chart shows Price, that doesn’t tell us about Value, one of our tenets of financial planning. How we evaluate what we are getting for the price is how we assess Value. This next chart is one way to do that.