DOW 20,000

Lots of people are excited that the Dow hit 20,000 this week—but what does it really mean?

DOW 20,000Fundamentally, it means almost nothing: simply that the combined value of the 30 big companies tracked by the index have risen to a new level that ends with four zeroes.

But investing is as much about perceptions as fundamentals, and because those four zeroes look impressive to our mammalian brains, the milestone is perceived to be important.

Personally, I couldn’t care less.

When I research growth stocks, I don’t judge them by the price they’re trading at; I judge them by their trends. And that’s what I’m going to continue to do.

Today, the market’s trend is strong; in fact, the trends of smaller, growthier stocks are even stronger than the Dow. So the Nasdaq Composite is where the real action is.

NasdaqBut because the Nasdaq is not trading at a big round number (as I write it’s at 5655), the Dow gets all the attention.

That’s fine with me. And if it gets even more people interested in investing, all the better. As I write, my portfolio in Cabot Stock of the Month is holding 18 stocks, and 16 of those positions are profitable.

To join me, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>