Four Words at Dow 40,000

May 20, 2024

Last week the Dow Jones Industrial Average crossed 40,000 for the first time.

Although round numbers may not inherently hold significance (is age 29 truly that different from 30?)—we humans tend to attach importance to these round milestones.

This achievement feels particularly surprising considering the recent barrage of challenges: rapid interest rate increases, inflation coming in hot, political drama, Ukraine and Russia conflict, and Israel and Hamas at war. Just a short while ago, a 40,000 Dow might have seemed like a dream disconnected from reality.

Yet here we are.

I love what one user on X/Twitter wrote in a tongue-and-cheek fashion about the S&P 500 stock market index the day before the Dow hit 40k: “the S&P is higher today than where it was before every terrible thing that happened in the past”.1

In all seriousness, the U.S. stock market has indeed weathered challenging events and market volatility throughout its history, from political upheavals and financial crises to global war and malevolence.

Staying invested is not easy. It never has been and never will be.

One dear client who passed away recently after a long, full life said four words to me in one of our quarterly reviews during a particularly challenging market that I’ll never forget:

“Stay in the buggy!”

It was when she said it and the way she said it—sprinkled with humor and backbone—that stuck with me.

You see it’s easy to stay invested when the market is chugging upward. Not so easy on the way down. But many have been rewarded by staying in.

Financial advisors like me exist to remind long-term investors of this very thing. So, mark this down for the inevitable future market downturn:

“Stay in the buggy!”

You will need it. 

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Sources:

1 Sam Ro 📈 (@SamRo) on X