A couple of weeks ago, the Dow Jones Industrial Average rose above the 30,000 level for the first time. I received a call that was just one more reminder of why I do what I do for a living. Making people's lives better by helping them participate in the staggering growth the stock market can provide over time is truly my calling.
In November of 1982, the Dow finally rose above 1,000 and never looked back. The Dow first tickled the 1,000 level in January of 1966—17 years earlier. Imagine living through two decades as an investor and seeing no progress in the stock index level!
After rising above 1,000 for good in 1982, the Dow Jones Industrial Average would continue to rise and hit 10,000 by the spring of 1999. After 17 years of watching the Dow go from 1,000 to 1,000 (with moments of sheer terror in between), imagine how investors felt seeing it rise to ten times that amount over the next 18 years.
“Mr. Y” called me the day the Dow broke 30,000. He reminded me that when the Dow broke above 10,000 twenty years ago, he was unsure about where the market was headed in the near term. He also reminded me that I had told him that he would see Dow 30,000 in his lifetime.
Mr. Y recalled that I also said, "Look, I don't know the direction of the next 1,000 points in the Dow. But I am confident that I know the direction of the next 10,000 points—and my family, along with all my clients, will need all of them."
To me, optimism is the only world view that squares with the facts. Envisioning a tripling of the Dow index over the next twenty years seemed reasonable in the backdrop of history. Heck, when I told Mr. Y the market would triple in his lifetime, I was sandbagging. After all, it would only require an annual return of just over five percent per year to get there.
I guess now I should update my response to, "Look, I don't know the direction of the next 6,000 points in the Dow. But I am confident that I know the direction of the next 60,000 points—and my family, along with all my clients, will need all of them." Getting from today's level of 30,000 to Dow 90,000 in a bit over two decades does not take much imagination for me. Call me an optimist, but we’ve seen it before.
And Mr. Y., I appreciated your call along with the bottle of champagne. Cheers.