A Reminder: The Trend Is Your Friend
I get asked a lot if I coach Advisors and the answer is “No, I don’t coach. I remind.” Literally. I think teaching is showing someone how to do a job. Coaching them is showing them how to get better. I think you get better by going backwards, by going back to the basics, so let me give you the most basic investing thought I can give you.
Watch the video or read the transcript below to learn the most basic investing thought and why the trend is your friend.
We all know the old saying, “The trend is your friend.” The stock market climbs a wall of worry. That’s never been more obvious than recently. With social media put on top of the mainstream media, the flow of information is faster and greater than ever. Everyone’s waiting for the other shoe to drop, always, in the market because there’s so much information about it. You’ve heard me say this before, but please allow me to lend my perspective on today’s volatility.
I’m over 70 years old. The day I was born, the Dow Jones Industrial Average closed at 188.58. The Dow was originally the largest 12 companies representing each of the 12 sectors of the US economy trading on the New York and NASDAQ stock exchanges. Today the Dow comprises thirty stocks. Those thirty stocks represent 70% of the market value of publicly traded America, so it’s important to view how the market closed, how the Dow closed, they’re asking how did America do today?
So the day I was born, November 3rd 1945, the Dow closed at 188.58. The day I got out of high school, the Dow closed at 716.49. The day I turned 65, the Dow closed at 10,522.59. As I sit here, the Dow is bouncing between 25,800 and 26,500. So no matter how much the market gets bounced around, the trend is always up. The Dow is more than 120 years old, and it’s as relevant as ever. The long-term trend is obvious. Tell your clients to focus on the destination, not the journey. The trend is up, and the trend is your friend.
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