Why the Dow Jones nearing 20,000 doesn’t matter

Why the Dow Jones nearing 20,000 doesn’t matter

The Dow Jones index is a great talking point for summer barbecues.

A good game, if you’re in the right crowd, is to ask how many of the 30 US stocks people can name.

You can check them against Wikipedia.

The index itself is an historical relic.

It’s not a representative sample of the broad US economy (and it’s calculated in a nonsensical manner).

dow jones

20,000 is a psychological milestone but it doesn’t change anything for serious investors, who will face the same risks and opportunities as before.

It’ll almost certainly move through the 20,000 level at some point—proving the old adage about investing being about time in the market, rather than timing the market.

It may be this week, later in the year or in the years after that.

Keep the Dow Jones up your sleeve for social small talk but, for us here in Australia, better to stay focused on factors that more directly impact our own economy and portfolios.

Steve Johnson is chief investment officer of Forager Funds Management.

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