The benchmark index for New Zealand's share market could hit 5000 points this week but analysts say share prices still haven't fully recovered from the global financial crisis.
The NZX50 index closed at 4951 points on Friday just 49 shy of the historic milestone.
But Mark Lister, head of research at Craigs Investment Partners, said removing the dividends revealed share prices across the market were still 14 per cent down on the high reached in 2007.
"If you strip them out and just look at where share prices are then our market is not back to where 2007 levels were at. The US has got back to where it was in 2007 and pushed through it."
Lister said that meant New Zealand share valuations were not back to the highs they reached before the global financial crisis when the local market fell by around 30 per cent.
"If you have spent your dividends you still haven't made back your money."
The NZX elected to take dividends into account in the NZX50 index in the early 2000s because New Zealand was seen as disadvantaged since many of its companies paid high dividends.
The NZX50 is the only index used internationally that uses a gross model rather than a capital only model.
James Smalley, director at broker Hamilton Hindin Greene, said stripping out the dividends meant the market was up by 21 per cent in the last 10 years - an average of little over 2 per cent.
"We are not toasting ourselves on yachts in the Bahamas."
Including dividends, the share market had averaged 21 per cent per annum over the last two years and 12 per cent per annum over the last five years.
But Smalley said retail investors typically focused on share price performance not gross dividend performance.
The key driver for New Zealand's market had been low interest rates.
Interest rates are expected to rise next year with the Reserve Bank expected to lift the official cash rate.
But Lister said that would not be all bad for the local market.
"It won't torpedo it but it will make it look a little less attractive."
Rising interest rates also signalled an improving economy which pointed to profits rising, he said.
Lister said his biggest concern for next year was the election due at the end of the year creating uncertainty.
Smalley said international issues could also derail the local bourse.
"The elephant in the room is the US market and if and when they will taper. What happens in the US will inevitably flow through to us."
Chris Green, director economics and strategy at First NZ Capital, said while the US situation remained concerning global growth was also accelerating.
"We are seeing signs of a pick-up in the US. Europe has stopped falling. The long-term position of fund managers is still cautious. The international backdrop is quite favourable."
Green said New Zealand also looked relatively attractive compared to Australia. "As long as the global environment remains supportive, we still have room to move up."