Last year was one for the record books: The Dow literally set a record for setting records. 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. In between its bursts of energy that eventually took the blue-chip index beyond the 20,000 mark in 2017 were long periods of misery when the market remained in a downward spiral or moved sideways. 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.īut the Dow’s upside trajectory has always not been smooth.
The Dow, which began its career with 12 components, has risen more than 50,000% over its lifetime. Investing is more challenging than brain surgery,” Kacher told MarketWatch. There is no such thing as a black box where you press a button and let it run indefinitely. Investors must stay fluid to changing market conditions and not become wedded to their stocks, said the strategist. 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.
But more than that, the graph also illustrates how the Dow has become a chronicle of investors’ responses to significant global events.Īt 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. Chris Kacher, managing director of MoKa Investors, published a graph of the Dow’s performance since 1896 that charts how the index’s peaks and troughs have reflected the U.S.
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