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Thread: Dow Hits Record High: Here's Why It Doesn't Matter

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    Dow Hits Record High: Here's Why It Doesn't Matter

    excerpts:

    Mark Gongloff
    Posted: 03/05/2013 10:59 am EST | Updated: 03/05/2013 11:27 am EST


    http://www.huffingtonpost.com/2013/0...n_2783096.html

    The best-known stock-market average in the world is at an all-time high. Unfortunately, that matters less than it ever has.

    A new high for the Dow Jones Industrial Average is an important milestone on the road to recovery, no doubt. The stock index has more than doubled from its low in March 2009, making this one of the strongest bull markets in history. At the same time, regular people have hardly benefited.

    The Dow Jones Industrial Average was up about 130 points to about 14,250 on Tuesday morning, on track to break its previous high close of 14,164.53 set on Oct. 9, 2007. After more than five years, at least one stock-market index has finally erased the memory of the financial crisis and Great Recession.

    Other, broader market measures still have a ways to go. The Standard & Poor's 500-stock index was still about 30 points away from its record high of 1565.15, also set on Oct. 9, 2007. And the tech-stock-heavy Nasdaq Composite Index was at about 3215, still light years away from its record high of 5048.62, set on March 10, 2000, back in its dot-com glory days.
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    DemocraticWarrior Battle Lord N.U.'s Avatar
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    It should matter. Here's why: The fact that the government couldn't get a deal worked out before the date of sequestration sent a loud and clear message to Wall Street. Unfortunately for us, the message is, "Don't worry about corporations paying their fair share, it's full speed ahead!"
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    Click here to enlarge Originally Posted by N.U. Click here to enlarge
    It should matter. Here's why: The fact that the government couldn't get a deal worked out before the date of sequestration sent a loud and clear message to Wall Street. Unfortunately for us, the message is, "Don't worry about corporations paying their fair share, it's full speed ahead!"
    I think you got that right!
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    Just thinking here for a minute... does this mean that portfolios are back to where they were on December 31, 2007:

    Dow Jones Industrial Average Closes At Record High

    AP | Posted: 03/05/2013 4:02 pm EST | Updated: 03/05/2013 5:52 pm EST

    http://www.huffingtonpost.com/2013/0...n_2813531.html

    In this run-up, nearly all the buying has come from companies repurchasing their own stock in an effort to boost its value. Companies in the S&P 500 have bought $1.5 trillion since the Great Recession began in December 2007.

    Dow records are dismissed by some investors as unimportant because the index comprises just 30 stocks. Many professional investors prefer to follow the S&P 500, which, as the name implies, tracks 500 companies. But the Dow has closely followed the ups and downs of its broader rival over the years, and is a good proxy for how big companies are doing.



    The Dow record does not include the impact of inflation. Adjusted for that, the Dow would have to reach 15,502 to match its old record.


    The Standard and Poor's 500, a broader index, closed at 1,539.79, 25.36 points from its record.
    The last time the Dow hit a record, George W. Bush still had another year as president, Apple had just sold its first iPhone, and Lehman Brothers was still in business.

    But unemployment was also 4.7 percent versus 7.9 percent today, a reminder that stock gains have proved no elixir for the economy.

    Still, the Dow high is another sign that the nation is slowly healing after the worst recession since the 1930s. It comes as car sales are at a five-year high, home prices are rising, and U.S. companies continue to report big profits.


    The stock gains have helped retirement and brokerage accounts held by many Americans recover. That, in turn, has helped push U.S. household wealth nearly back to its peak before the recession, though many in the middle class are still deep in the hole. Most middle-class wealth is tied up in home values, which are still a third below their peak.

    From its peak in October 2007 to its bottom in March 2009, the Dow fell 54 percent. That was far less than the nearly 90 percent drop in the Great Depression but scary nonetheless. There had been 11 previous bear markets since World War II and none had reached 50 percent.




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    Doesn't seem to be. I watch the Dow go up and my meager portfolio go down.
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    Click here to enlarge Originally Posted by Xena Click here to enlarge
    Doesn't seem to be. I watch the Dow go up and my meager portfolio go down.
    You're stuff is likely to be companies that are in other indices, like the S&P 500, or the Wilshire 5000.

    Do you own stock in these DOW companies:

    3M Co
    Alcoa Inc
    American Express Co
    AT&T Inc
    Bank of America Corp
    Boeing Co
    Caterpillar Inc
    Chevron Corp
    Cisco Systems Inc
    E. I. du Pont de Nemours
    Exxon Mobil Corp
    General Electric Co
    Hewlett-Packard Co
    Home Depot Inc
    Intel Corp
    International Business Machines
    Johnson & Johnson
    JPMorgan Chase and Co
    McDonald's Corp
    Merck & Co Inc
    Microsoft Corp
    Pfizer Inc
    Procter & Gamble Co
    The Coca-Cola Co
    Travelers Companies Inc
    United Technologies Corp
    UnitedHealth Group Inc
    Verizon Communications Inc
    Wal-Mart Stores Inc
    Walt Disney Co
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    Otoh, if you bought into the market for the first time in 2009, you may have doubled your money.
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