Last few days have been filled with drama for the equity investors. Will the DJIA hit 13000 or not? It did yesterday and now we can only move on with our lives. But what was all the fuss about it?
Here is the DJIA for the last 100+ years. Can you see similar patterns? I do .
Let’s take first the most talked period 1920-1940. DJIA moved up and down but in the span of 20 years the trend is not upward or downward is just sideways.
The same is true for the 1960-1980 period. No real trend just a sideways move.
Finally for the period of great wealth creation, after 20000 DJIA shows the same sideways movement. My point is that recent equity market is not part of some long term upward trend but rather of a long term sideways move.