Stock market ups and downs

When the stock market is falling
one way to view some perspective
is to look back in time to when the
index was last at this level. If the
stock market has risen rapidly,
and then falls rapidly, possibly
only a few recent months of gains
have been deleted. If the market
falls rapidly after a long steady
climb, then maybe a few years worth
of gains have been eliminated.

Today the close for the Dow Jones
Industrial average is about 16,000.
It recently has topped 18,000, but
it was near 16,000 as recently as
August 24 (closing value: 15,871).

Source:

http://quotes.wsj.com/index/DJIA?mod=mdc_uss_dtabnk

Prior to the fall in August the index
had been above 16,000 for a couple years after
first crossing that level in November 2013 (see

http://www.cbsnews.com/news/dow-hits-16000-for-the-first-time/

Since interest rates have been very low recently,
many investors have moved to stocks. Most likely
interest rates will be rising soon, so stocks
likely could become a less attractive investment
in the future.

If you have a lot of time to watch the details,
and you have a high tolerance for risk, you can
put a lot of effort into stock market investing.
For most people, the best thing is to put long-term
savings in a diversified account, which will likely
average out the risks of individual stocks. Then
you can sleep better by looking at long-term trends
in values rather than day-to-day fluctuations.
……………..
–Douglas Downing
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