Dow 36,000

Dow 36,000

On October 1, 1999, James Glassman and Kevin Hassett published a book about why the stock market surge of the late-90’s would continue.  They predicted that in about 3-5 years the Dow would move from 10,273 to 36,000.  This milestone was met, but not until November 1^st of 2021 – 22 years later.  Everyone knows it is folly to make market predictions, but at least the authors of Dow 36,000 can console themselves with the royalties off their book (it was a smashing success).

Over the past 22 years the Dow has averaged an annual rate of return of 5.9%.  This number may seem low to many people, but a lot has happened since October of 1999.  For a brief stroll down memory lane, let’s list a few of those most notable items:  tech bubble crash, September 11^th, Enron, the wars in Afghanistan and Iraq, Hurricane Katrina, housing crisis and market crash, Bernie Madoff, Greece, Oil over $100 per barrel, oil under $0 per barrel, Brexit, the election of Donald Trump and trade war with China and of course Covid-19.  After reading through this litany of woe you might be grateful for an annualized return of 5.9%!

So, what will the future bring?  Dow 50,000?  Most assuredly, but unlike Glassman and Hassett we won’t provide a date.  We do believe stocks will continue to provide investors with the potential to help meet their long-term goals, however they should not project recent strong stock market returns indefinitely into the future.  5.9% might actually be a number that sounds about right over the next several years given where things sit today.  Of course, we don’t know – nobody does, which is why we remain balanced and diversified and firmly focused on our clients’ long-term goals.  Dow 50,000?  Of course.  When?  That is part of what makes investing so interesting.

The Bond&Devick Team