March 15, 2012
What happened to the "news" story that was Dow 13,000? Over the last few weeks as US stock markets rose and the Dow Jones Industrial Average flirted with 13,000 stories filled the financial media. Their content was a typically breathless "will it or won't it" close above that magical mark. Experts opined on the "psychological importance" of this and other market measures.
And then what? US financial markets have been up for 7 straight trading days, the Dow is solidly over 13,000 (13,200 as I write this) and it's not a topic anymore. Why not? My view: it was never a legitimate topic in the first place.
I started in the investment business when the Dow was at 1,000 and can remember when some people predicted that the Dow would reach 5,000, or 7,000, or even 10,000 - some day. I also remember the "experts" who denounced those predictions as crazy, impossible fantasies. Marks don't move based on the level of some arbitrary index. Markets move, in the long run, based on dollars and cents: sales, earnings, dividends. The rest is noise. I'm bullish on the US economy, and I'm bullish on our stock market. Ignore the noise; enjoy the ride.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).
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