Markets come and markets go….up and down.

Markets come and markets go….up and down.

February 12, 2018

Well, we just passed another milestone…Dow 26,000.

Then....Dow 24,500 . The Dow is up 1,000 points in just a few weeks, and then down over 1000 points just as quickly. Can we see 30,000 by year-end? 

Actually, I was discussing this with a close friend recently, and she forwarded a post by another advisor on just this topic. We completely agree and both said practically the same thing apart from one another. 

If you think about a 100 point gain in 2010 (just 8 years ago) when the market was at 10,500, then 100 points was a 1% gain, right? Today that same percentage is over twice that, so for the DOW to gain 1% it needs to gain 250 points. And a 1,000-point gain was 11%!!! Today that same 1,000-point gain is only 4%. 

So, let’s be clear and keep in mind, that even as the papers are using terms like “soaring” and “plunging” when we’re talking 250 points intra-day change, we’re ‘just’ talking one little percent. Can we even consider that the market could go from 25,000 to 30,000 in one year??? Well again, that is a 20% change and we just came out of a year that saw a 25% return. We’ve had 13 years with a 20% return or more since 1980. So, yes, 30,000 is possible and even likely if we everything were to stay status quo…just like today. *But keeping in mind there are NO GUARANTEES, ever.

Let’s keep our eye on the horizon and our ears to the ground as we continue to plan for the long term. Keep in mind that double-digit corrections are likely, but the market has historically always come back and sometimes even within the same year! For example 1997, 1998 and 1999, where we saw double digit declines and finished the year with double-digit returns.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk, including the risk of loss.