Is Dow 16,000 just a number?
A reporter called me as the Dow Jones Industrial Average approached a close above 16,000 on November 21, 2013. “What does it mean?” she asked.
I told her the standard pat answer is that 16,000 is just a number.
However, given the sheer horror that most investors felt in 2009 when the Dow bottomed at a significantly lower level, this will send a comforting psychological (and financial) message. It also will educate investors that, if they are patient, they will see reasonable investment returns over time.
Importantly, investors need to store this milestone in their minds so that when the markets again turn negatively volatile, they are not driven by emotion to sell.
It has been a rewarding recovery in equity prices and reinforces several investment maxims, the most important of which might be “staying the course.”
All comments and questions are welcomed.
Bob Bilkie, CFA