Thirty-Seven Percent of Investors Unfazed by the Dow Reaching 30,000

This week’s Sentiment Survey special question asked AAII members to share their opinion about the Dow Jones industrial average crossing above 30,000 for the first time.

Just under two out of five respondents (37%) say that the all-time high for the Dow is meaningless and that “it’s just a number” with too much assigned importance. In other words, respondents within this group think that it is not an indicator of the future direction of the market. This compares to about 23% of respondents who say that the market is due for a correction. About 20% of respondents say that the new record for the Dow can be characterized as irrational exuberance of the frothy market. In addition, 17% of respondents say that they expect it to continue to increase and that we are at the starting point of a major bull market.

Here is a sampling of the responses:

• “This is a reflection on the coronavirus vaccine prospects, the relatively strong economy that is struggling due to self-inflicted wounds from foolish governmental leaders, and the fact the presidential election is over (even if the results are still slightly in doubt).”
• “It may continue to advance for a few months, however the entire market should zigzag down to a real correction reflecting a reality check of the true economic damage to the world financial and equity markets.”
• “The Dow is not a true indicator of the market, thusly, its value is not an indicator of anything relevant. The S&P 500 is a slightly better indicator. The S&P 500 breaking above 3,600 is much more impressive.”
• “Breaking this barrier indicates momentum is still there, regardless of the political results, and it looks like this momentum may carry the market to new highs in 2021! I believe it also signals strength in the new vaccines that are about to hit the market, and hopefully that will help return daily living to a more normal routine.”
• “It’s concerning, to say the least, with the market at all-time highs, yet we are still in the midst of a deep economic recession. While I do believe that in late 2021 and 2022 we will see a global economic boom that we haven’t seen since the end of World War II, much of that economic prosperity is already being priced into the market. I’m waiting for a sharp correction sometime in the first quarter of 2021 before adding to my equity position.”

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership