Watching the DOW

Today the DOW lost about a quarter of yesterdays gain , and if they have not already started I am sure that the doomsayers and those who want this nation to fail are getting ready to pounce on what they want us to think is a significant event.

I don't have any of my limited wealth invested in the stock market and I never have, so I never developed the habit of watching the DOW or any other financial indicators on a daily basis except when the national economy was in trouble or there seemed to be a trend one direction or the other of which some news broadcast made me aware.

The economy being in trouble I have been watching it more in recent months, and watching the coverage of its fluctuations. The recent coverage of a small drop following a four days of modest gains is what made me start thinking the media and much of the public is making too much of "Watching the Dow" on a daily basis.

The Dow goes up some days, the Dow goes down on others. It is my understanding that this is normal, and unless there is a really large reversal of direction it isn't worth noting on a daily basis unless you have money invested in stocks that could have an impact on the daily average. I am not sure even that is a valid reason for being concerned about the daily averages. I'd be watching what is happening to the stock of companies in which I have invested and for news relating to those companies that might affect the value of my investments. Furthermore, I'd have to have a substantial portion of my wealth invested in them to pay even that much attention, otherwise I'd have my funds sitting in nice safe FDIC insured accounts that didn't pay very much interest, but spared me worrying about wealth I couldn't afford to lose.

I am glad I took the safe route and fluctuations in the DOW daily average are little more than an intellectual curiosity to me. How about you?

Comments: 3

Spencer T. Mar 24, 2009, 6:02pm EDT

I do agree with you about rising and falling trends in the Dow. The Dow is a very small group of companies which are used as an indicator of how the market is doing. I have not had any money invested in the stock market in a few years now but have in the past done what is called day trading. I look at a specific industry and decide which one might move one way or the other and produce a quick profit. I look for trends in that industry and right after opening buy a few shares of whatever. When those shares tick up a few points I sell and take my profit. Depending on the cost of the shares and the spread I might make a couple hunderd dollars and at times a bit more. It is normal for the market to react to large buying action and when these buyers sell later that day or the next fall in price. In many periods of the stock market one can easily find a long upward trend or even a downward trend in which one can make money though it is generally accepted that over a long period of time one is more apt to earn profits.

At this point of the market there are lots of companies which lost value on their stock not as a result of their own management but due to the overall nervousness of the market which drug far too many company values down. I am sure many are watching th edaily movements in an attempt to find some good investments. But like you I am growing weary of the daily reports of the positioin of the market as reported by the media.

Good article.

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Tammy N. Mar 24, 2009, 8:01pm EDT

We are investing in the market and still don't watch it everyday. Our goal is long-term retirement investing. As we approach retirement, we'll start moving money out of the stock market and into less risky accounts. In the meanitme, we are enjoying the down market because it allows us to afford more shares for our usually monthly investment.

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Robert S. Mar 24, 2009, 11:09pm EDT

Everybody wants it all to be better tommorrow. Give it a year and then we can evaluate the economy and see where we are at.

It could be a very very long time before the Dow hits 14000 again. Remember at 14000 the economy was based on a house of cards and it collapsed.

I wonder where the Dow would have been if the economy had been legitimate? 10000? When the bubble bursts it is difficult to reinflate.

Fortunately my retirement is very conservative and I have felt no impact. If this lasts too long however I could get hurt.

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Watching the DOW

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