With just one day’s trading to go, the gap seems to be too big. At the end of last week, the Dow Jones Industrial average closed at a six year high, and, or so proclaimed commentators, the index was within just 380 points of its all time high, and it seemed as if the record could go this week.
Last night the index hit a new six year high, but at 11382 is just 35 points up on the week, and the record, reached in January 2000 of 11750 seems a little too elusive.
When Wall Street took its famous fall in 1929 it took over 25 years to return to that level. Some warned history could repeat itself. It’s worth remembering, however, that the years that followed that dramatic crash were blighted by the awful US depression of the 30s, and then the Second World War. In contrast, the years following the 2000 high have been followed by a period of rapid US growth, blistering global growth, and an eaten pudding. Back in 2000, dotcoms represented a dream, an idea for the future. Then, investors said the proof of the pudding is in the eating, and there’s no sign of Dotcoms making any money. But, since then, it’s been proven that the Dotcom market really does exist, and the longed for potential really was real and no idealist’s dream.
And while international tension has been ever present (but that’s not new) and the events of September 11th were truly horrifying, the world has seen nothing like the war that followed in the aftermath of world wide economic crisis of the fourth decade of the last century.
Its seems unlikely that there will be a 25 year wait this time for the Dow to hit a new all time high.
© Investment & Business News 2013