Keep market gains in perspective

October 20, 2009


Someone asked me if I was excited when the Dow once again hit the 10,000-point mark.


It was October 2008 when we last saw that five-digit number. Now, on Oct. 14, the Dow Jones industrial average again closed above 10,000 — 10,015.86 to be exact. Should we be cheering, or remain cautious about this recovery?

First, understand what the Dow is. It is the most widely used indicator of the overall condition of the stock market. It’s also just a snapshot comprising the 30 biggest and most prominent blue-chip stocks.

The first time the Dow hit the 10,000 benchmark was in 1999, and its all-time highest close was 14,164.53 in 2007.

So what should we think of this most recent development? To find out, I interviewed some financial experts about this milestone.

Dallas Salisbury, president and chief executive of the Employee Benefit Research Institute, is not in awe.

“Extraordinary losses or gains should never excite the average individual investor in a positive way, as they underline the irrationality of the markets and the absence of any individual control over the markets,” he said. “Winning or losing, it is more and more like being at a table in Las Vegas.”

Salisbury said that now, more than ever, individual investors should be trying to decide how much they can afford to lose in the stock market and how much of their money needs to be safe and not subject to big swings in value.

It’s good for investors to have some recent and somewhat sustained relief from the wide and volatile swings of the past, said Syrinda Elizabeth Paige, a certified financial planner with the Lighthouse Group at Morgan Stanley. “Most importantly, investors should stay focused on knowing their own numbers,” Paige said. “When I say their own numbers, I mean knowing what rate of return they need to live comfortably based on their own personal goals, their time horizon and expected expenditures.”

Ernest Burley, a certified financial planner with Burley Insurance and Financial Services based in Bowie, Md., is upbeat about the 10,000-point benchmark. “It’s always exciting to see positive returns,” he said.

But Burley urged cautious optimism. “I don’t think there should be blind excitement and thoughts of being out of the woods and we’re back to high returns again,” he warned. “Enjoy it for what it is — a current uptick in the market.”


Richard Heckler 8 years, 7 months ago

The stock market is for those who can afford to lose money. During the 20th century, there were several periods lasting more than 10 years where the return on stocks was negative. After the Dow Jones stock index went down by over 75% between 1929 and 1933, the Dow did not return to its 1929 level until 1953(24 years).

In essence if Wall Street is your retirement tool one may wait on Wall Street before retirement can take place. Under deregulation who knows how long retirement will last?

Wall Street is NOT a picture of the overall economy.

The overall economy cannot bounce back and remain substantial until 20 million jobs are back in place. This cannot be achieved by the continued flow of jobs to China,Pakistan and India..... we're talking many millions of jobs.

These criminal activiteis cannot be tolerated yet are taken very lightly as some very big names should be going to jail.

  1. The Reagan/ Bush Home Loan Scandal = lost jobs,lost retirement and lost medical insurance not to mention loss of homes! And a Wreckanomic economy. http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

  2. The Bush/Cheney Home Loan Scandal = lost jobs,lost retirement and lost medical insurance not to mention loss of homes! And a Wreckanomic economy. http://www.dollarsandsense.org/archives/2009/0709macewan.html

  3. What did Bush and Henry Paulson do with the bail out money? FRAUD! http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

  4. Why did the RINO’s Lie About Social Security? DECEPTION AS FIRST STAGE OF SOCIAL SECURITY THEFT http://www.dollarsandsense.org/archives/2005/0505orr.html

White collar criminals are lurking about throughout the financial world: • ENRON • high tech scandal • Global Economy = millions upon millons of lost USA jobs • Iraq/Afghanistan Illegal Occupation = loss of good incomes • Maddoff ripoff • Book Cooking Scandal

Deregulating the financial industry was a disaster for all except the white collar criminals.

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