It’s so Close, yet also Far Away

Today, the Dow made the second attempt in as many days to surpass and stay above its all time high of 11722.98, set on January 14, 2000. With only five points away when it closed yesterday, that magic number seemed so close that nobody would doubt it was there for the taking. Yet, when all is said and done, the market pulled back, settled at 11679.

People always talk about psychological barriers of the index and 11722.98 may just be one for the short-term, but how significant is the number? Once we reach it, does it mean that economy has recovered to the level of 2000? Or it’s just a number that can bring our memory back to the go-go days of stock markets?

Today, the markets are more driven by earnings and economic news than hypothetical promises, and the overall environmnet is different from that of 2000 when both the Dow and Nasdaq set the records. People now are getting realistic about their financial goals and nobody is expecting their wealth to jump ten folds overnight. One lesson learned from the burst of Internet bubble is we need build our wealth by investing wisely, not hypothetically.

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