Investors may spend a lot of time fretting over whether their portfolios are going up or down. But, despite all of the advances in stock market data availability, many may not be getting an accurate picture of what their portfolios are really doing, says The Wall Street Journal’s Jason Zweig.

According to Zweig, after last Friday’s decline, the Dow Jones Industrial Average was 11% below its 2007 high; the S&P 500 was 14% off its high. But those figures — which involve the data cited on many financial web sites — don’t include two big factors: dividends, and inflation. “Factoring in dividends, the Dow on Thursday was only 0.1% below its all-time high, while the S&P 500 was off just 6% from its own highest level ever, according to Morningstar,” Zweig writes. “For the year so far, they were up 11.3% and 8.7%, respectively, factoring in dividends.”

When inflation is factored in, however, the returns are lower. Inflation would have eaten away 9% of your purchasing power since the market’s October 2007 high, “leaving the dividend-adjusted Dow off some 8% from its peak in real terms and the S&P down 14%.”

Zweig also discusses the broader sentiment climate for stocks. “Why does this bull market seem so forlorn?” he says, noting that the Dow — adjusted for dividends and inflation — is up 5% this year. “Recovering from a loss feels very different from giving up a gain. Psychological experiments have shown that if an investment goes up, then falls back to what you paid for it, you will tend to fixate on the times when the investment was rising above your purchase price. But if, instead, it goes down after you buy, then you will focus on how much you paid for it — effectively turning your entire investing experience into a desperate wait to get back to break-even so you can get out. It is no wonder investors have been dumping stock funds like mad even as the market has been steadily rising.”