Chart Watch {120 Years of the Dow Jones}

Titled, "Human Innovation Always Trumps Fear",  Market Watch recently posted a 120 year chart of the Dow Jones Industrial Average.  You should be able to double-click on the chart to make it larger.  If that doesn't work then following the link to the original site provides a way for you to see this in a larger format.  Here is the chart and below it is some of their commentary.

"Chris Kacher, managing director of MoKa Investors, this week published a graph of the Dow’s performance since 1896 that charts how the index’s peaks and troughs have reflected the U.S. economy’s triumphs and tribulations. But more than that, the graph also illustrates how the Dow has become a chronicler of investors’ responses to significant global events. 

At its simplest, the chart proves once again that over the long term, the stock market always rises because “intelligence, creativity, and innovation always trump fear,” according to Kacher. Yet at the same time, it also underscores the basic mantra that market participants need to stay nimble during times of uncertainty to maximize their returns. Investors must stay fluid to changing market conditions and not become wedded to their stocks, said the strategist. 

“There is no get-rich-quick scheme. There is no such thing as a black box where you press a button and let it run indefinitely. Investing is more challenging than brain surgery,” Kacher told MarketWatch. 

The Dow DJIA, -0.46% which began its career with 12 components, has risen more than 50,000% over its lifetime. During the same period, the U.S.’s nominal gross domestic product has boomed 118,583%, according to Measuring Worth, a website run by academics Lawrence Officer and Samuel Williamson.

But the Dow’s upside trajectory has always not been smooth. In between its bursts of energy that eventually took the blue-chip index to the 20,000 mark in 2017 were long periods of misery when the market remained in a downward spiral or moved sideways. 

As the chart shows, it took 25 years for the market to recover from the 1929 stock-market crash, and 16 years for stocks to bounce back from the combined effect of the Vietnam War, the 1973 oil shock and the resignation of President Richard Nixon."

*Certain clients of our firm currently hold legacy shares in ETFs related to the Dow Jones Industrial Average.  These positions can change at any time without any form of notice on this blog.

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