25 Jan Wow! Dow 20,000

What a ride it’s been. In March 2009 at the nadir of the last bear market, the Dow Jones Industrial Average hit 6547, the lowest it had been in 12 years. Today the Dow hit 20,000 for the first time. So if you invested at that low you’ve tripled your money in the last 8 years. But one thing we know for sure. The market goes up. Then it goes down. Rinse and repeat. The only thing we don’t know is when and how much.

The “Trump rally” of around 6% has been impressive, but Presidents Johnson, Clinton (2nd term), Kennedy and Eisenhower (in order from strongest) had larger rallies between their election and inauguration. But he beats both of Obama’s post-election results. Clearly the market is sending a message of hope that Trump’s policies will be good for the economy. Lower regulation, bringing jobs back, lower taxes, are all things public investors generally like to hear.

So here’s the thing. Over the long term, investing in equities generally outperforms about any other form of investing. I remember as a young lawyer back in 1987 when the Dow hit 2000 for the first time. Since then a 10x return. Not bad for a thirty year period.