Market pundits and the financial press always make a big deal out of markets reaching new highs … and a really big deal when it’s a round number. So for those who think that Dow 17,000 is a big deal, here’s a little history lesson about the Dow and other milestones that were a “Big Deal.”
November 23, 1954: The Dow Jones Industrial Average closes at 382.74. The first time it closed above the peak it reached just before the 1929 crash. That’s a span of 25 years.
In the interim, the world saw the Great Depression and World War II.
November 14, 1972: The Dow Jones Industrial Average closes above 1,000 (1,003.16) for the first time. It took 10 years before it broke through this level again.
December 9, 1974: Dow Jones Industrial Average index hits 570.01.
November 3, 1982: The Dow Jones Industrial Average closes at 1,065.49.
May 20, 1985: Dow Jones industrial average closes above 1300 for first time.
December 11, 1985: Dow Jones industrial average closes above 1500 for first time.
January 8, 1987: Dow Jones industrial average closes above 2000 for first time.
October 19, 1987: “Black Monday” Dow Jones Industrial Average falls 22.6%, the largest one-day drop in recorded stock market history.
January 29, 1989: Dow Jones Industrial Average regains all of the 508-point loss since October 1987.
April 17, 1991: Dow Jones Industrial Average closes above 3,000 for first time.
February 1995: Dow tops 4,000
November 1995: Dow tops 5,000
October 1996: Dow tops 6,000
February 1997: Dow tops 7,000
July 1997: Dow tops 8000
March 1999: Dow tops 10,000
January 2006: Dow tops 11,000
October 2006: Dow tops 12,000
April 2007: Dow tops 13,000
October 2007: Dow tops 14,000
2008: Beginning of the “Great Recession”
March 2009: Dow closes below 7,000
October 2009: Dow tops 10,000
July 2014: Dow tops 17,000
We need to avoid “irrational exuberance” as well as the belief that every milestone marks the top of the market. That is why careful, intelligent portfolio construction is so very important. No one knows what the future holds. We can be fairly confident that new highs will be reached. We just don’t know when and what route we will take to get there.
The issue for most people is not what the market does, but what their portfolio does and how it supports their lifestyle. For guidance, contact us.