Some numbers matter more than the DJIA closing over 13,000
By Dian Vujovich
Traders, investors and talking heads have been anticipating the day the DJIA closed over 13,000 for days. But there are far more important numbers to focus on than what’s happening with the 30-stocks that make up that industrial average.
Okay, let’s get all the hoopla out in front before getting down to the numbers that really count.
First, the hoopla: The Dow Jones Industrial Average closed Tuesday, February 28, 2012 at 13,005.12. That’s the first time it has closed at that level since May 19, 2008 when that day’s close was 13,028.16.
The S&P 500 also closed yesterday at a notable high of 1,372.18 and NASDAQ too, at 2,986.76.
Those are all big deals particularly for bullish equity investors who have some or all on their money invested in index-related securities or funds.
But there is always at least one more side to the performance story other than how the indices are doing. The price of oil and gold are two of them. A couple more include bond prices, inflation concerns, global economics and we can’t overlook the overall state of our own economy. And oh yeah, the fact that market corrections as natural a part of the investing game as market gains are.
Regarding that last point, the stock market—as measured by any index– was up 20 percent or more from October 3, 2011 through Feb. 24, 2012, according to the most recent Navellier MarketMail. Over that time span the DJIA moved from 10655.3 to 12,982.95 for a gain of 21.84 percent; the S&P 500 from 1099.23 to 1365.74, up 24.25 percent; and NASDAQ gained the most–up 26.88 percent—moving from 2335.83 to 2963.75.
Since we all know the old Wall Street adage about how trees don’t grow to the sky, it’s not out of the realm of good possibilities that there will be a correction in equities in the not so distant future. Especially with oil prices around the $107 level, Brent sweet crude prices in the $125 a barrel range, and gold holding its own at around $1780.
But there are other numbers that matter far more than the hoopla over how the indices have performed. The most important one is how the stocks in your very own portfolio are performing.
Now if that portfolio is 100 percent invested in Apple stock that you purchased a couple of years ago, then you’re probably flying as high as a Power Ball winner. But not every single stock investment pays off. That’s never been the cases and never will be.
So do the math. Then use the indices as a yardstick to measure your gains and losses and celebrate accordingly.
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