Review: Why Dow 20,000 Is a Meaningless Milestone

People like round numbers. Investors really like round numbers. But just because a number has a lot of zeroes at the end doesn’t mean anything. We’re seeing this all over again because the Dow Jones Industrial Average is closing in on 20,000 (by the time you read this, it may very well have already surpassed it).

But here’s the thing: these numbers are completely arbitrary. 20,000 is no more significant than 19,900. I want it to cross those thresholds, but only because I want the market to keep going up.

There’s nothing magical about big round numbers. Especially when you think about how the Dow is actually calculated (to put it mildly, it’s both a mess and a holdover from when a computer was a person wearing a green visor).

So what should you do now that the Dow is in unprecedented territory?

Nothing much. Actually, nothing at all. Just keep doing what you’re already doing – provided what you’re doing is holding a well diversified, passive, long-term portfolio, built around your risk tolerance.

To find out more about how to keep your portfolio on track, read our

 

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