Bouncing Dow

In February 2016, the Dow was at 15,541. In February 2017, the Dow was at 20,090.  In February 2018, the Dow hit its peak at 26,168. We benefitted from a 10,645 point gain from 15,541 to 26,168. That was a 68% gain.

On 2/5/18, the Dow dropped to 24,345, a loss of 1175 points. Since 2/5/18, the Dow has bounced for 2 months between 23,000 and 25,000.

I believe the climb in 2017 was due to anticipation of the corporate tax cuts that were passed in 2018 and the climb included a 1000 point bubble.

I believe the bounce returns the Dow to benefit day traders, who now need the Dow to bounce up and down, so they can buy low and sell high.  I believe the excuses being made for each large drop and each large gain by the media are false.

The Dow doesn’t drop and rise on fears and rumors. The Dow is based on the stock prices of 30 big US companies. The S&P 500 is a better gage to measure the US economy.

The stock market still remains the investment of choice. Interest rates may rise a little and prices will rise like they have been rising, but our money is probably still safe in the index funds.

See my post from February 7, 2018 titled Stock Correction.

Norb Leahy, Dunwoody GA Tea Party Leader