I’m sure a lot of families are wondering what to do now that the Dow Jones Industrial Average has reached 17,000. Is this a good sign or does it mean danger?
I’ll refer you back to a post I wrote almost exactly one year ago on the subject of the market reaching an all-time high. In short, this doesn’t mean anything. An all-time high is not necessarily an indication that the market will turn down, nor is it an indication that it will keep going up.
More importantly, how does this effect inheritors of wealth who are investing for the long, long term. For these families, it is particularly important avoid the temptation to follow investment “signals.” Over the course of a lifetime, financial markets will reach all-time highs again and again and again. It doesn’t mean anyone should get out. What if my great grandfather had sold out when the market hit an all time high! It would certainly look like a regrettable decision today.