On the 1st of July, the German stock index DAX celebrated its twenty-five year anniversary. 25 years ago, on the 01.07.1988 the German leading index was noted for the first time with 1,163 points. The DAX reached its highest level to date in May of this year, when it stood at 8,557 points.

Would you have placed 10,000 euros back then, you would receive 68,250 euros today, representing an annual yield of around 8%.

The individual stocks in the DAX have developed quite differently. While the German Telekom and Commerzbank shares were among the worst (they lost more than 90% in their worst times), other titles such as BASF, with a performance of 2.900%, Volkswagen and Bayer with approximately 2.000% shined (each including dividends).

Since the German DAX was designed as a performance index, the dividends, which pay off the stocks in the Dow, play a significant role as they are automatically reinvested in the index.

Meanwhile, the German DAX has established itself as a benchmark. It’s a good indicator of the state of the German economy.

Judging from current prices, one could conclude that the state of the German economy is safe and sound.