Dow 20,000 Is Just An Arbitrary Round Number

The Dow closed 19,792 today. The media has been highly publicizing the Dow 20,000 story in the past few days as if reaching that figure means some great thing. In reality 20,000 is just another round number. The percentage increase or decrease over a period is more important than 20,000 or any other number.

The last time Dow reached 10,000 it crashed twice over the next 10 years according to an article by David Blitzer at S&P Indexology. The chart below shows the two big bear markets since the Dow reached 10,000:

Click to enlarge


Source: Round Numbers and the Dow, S&P Indexology

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