Computed Historical Data #

The FI Calc algorithm uses some values that are derived from Shiller's data set.

Inflation #

Shiller provides the Consumer Price Index (CPI) for each month in his data set under the column "Consumer Price Index." The equation to derive inflation from the CPI is:

$inflation = \frac{\displaystyle currentYearCpi}{\displaystyle previousYearCpi} - 1$

Inflation for the first year, 1871, is set to 0 (representing no inflation).

Inflation Example #

The CPI for January 1990 is 127.40, and for January 1991 it is 134.60. Placing these numbers into our equation yields:

$\frac{currentYearCpi}{previousYearCpi} - 1 \\[0.8em] = \frac{\displaystyle 134.60}{\displaystyle 127.40} - 1 \\[0.8em] = 1.0565 - 1 \\[0.8em] = 0.0565$

Therefore, inflation for the year 1990 is 5.65%.

Stocks #

Shiller's data set provides the price of the S&P 500 for each month. In his spreadsheet, the value for the S&P 500 is under the label "S&P Comp. (P)".

Deriving the capital appreciation of stocks, therefore, is:

$capitalAppreciation = \frac{\displaystyle currentYearValue}{\displaystyle previousYearValue} - 1$

Dividend Yields #

Coming soon.

Bonds #

Shiller's data set includes bond returns by month, which FI Calc consumes directly.