The Dow Jones Industrial Average has been a standard by which to judge the US stock market for over a hundred years. As I write this the DJIA is up about 100 points to 10,134. Over the last week the average has dipped below then back above that magical 10,000 mark a number of times, inciting financial talking heads to ponder the great question of our time: Can the Dow stay above 10,000? The money media is in a lather and The New York Times even calls the 10,000 mark "crucial." If you are a regular reader of this blog you can probably guess my reaction:
Stocks don't know what the Dow is, even if buyers and sellers do. Stock prices represent an auction-based consensus of where buyers and sellers are willing to meet on a given day. And while in the near term bullish buyers and skittish sellers might move the market, longer term it all boils down to earnings and dividends. The economy is coming back, unemployment falling (slowly), and corporate earnings are rising. You probably took a shower and brushed your teeth today - just two more good deeds for our economy. If you're an investor, forget about Dow 10,000. After all, when I entered the investment field the great question of that time was: "will the Dow get above 1,000?" So much for great questions. So much for the battle for 10,000.
(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).