How has the DOW performed historically?

Question

What do you think of the current dip down to a little over 12,000?

-newbie to mutual funds

Answer 1

The secret to stock market is to believe that tomorrow will be a great day. You can even make money on a losing market. We all know dow is trading low at 12000 but this gives a good opportunity to buy lowest priced good shares to make money.

Answer 2

Historically looking at the time line, it is a constant up trend with little bumps along the way. As far as the current trend, I believe you will find it in a trade range for the rest of the summer with 12,000 pretty much being the bottom support and 13k the resistance at the top.

Answer 3

Historically, it's up with 9% annual average.

http://dividend-growth.blogspot.com/

Answer 4

Historically the DOW returns around 8-10% annualized. However, that is very misleading for the individual investor. Rarely does the market actually perform in this range, more often its -5%, +18%, etc. averaging to this often quoted return in the media and by financial advisors. However, depending on your time horizon, the 'average', is absolutely worthless.

What should be important is managing your assets thru the market ups and downs using key factors of market timing that you can implement in your own portfolio. It is a great myth that individuals, with some education, can't time the market.

In terms of the 12,000 number. It is a moment of truth for the Dow. 12,000, aside from its psychological number, it also happens to coincide with a multi-month uptrend. If broken, a quick and rapid fall 500+ points over a few days or weeks would be very likely. If it holds, we are likely in a trading range until the financial mess clears itself.