How Much of S&P 500's Growth is Due to Inflation?

S&P 500 has returned +1,436.0% nominally since 1993, but only +133.9% when adjusted for M2 money supply expansion. This means approximately 90.7% of S&P 500's price appreciation is due to monetary expansion rather than real value growth.

S&P 500 has significantly outperformed M2 money supply expansion, indicating strong real value appreciation. This suggests the asset has generated genuine wealth beyond what can be explained by monetary expansion alone.

Adjusting stock performance for M2 money supply expansion reveals how much of price appreciation is due to monetary policy versus real value growth. This perspective helps investors understand whether an asset is generating genuine wealth or simply keeping pace with money supply growth.