I often come across interesting images or thought-provoking data that I want to share with our community, but may not dictate 1,000+ words on the subject. Today, I want to launch a new series that explores these fun-facts in more bite-sized pieces. Click the image above for an expanded view.
Rules of thumb are common in the investment world. There’s the “rule of 72”, which gives us an idea of how often money will double. The safe retirement withdrawal rate lets us know how much we can “safely” draw from retirement portfolios without significant risk of long-term depletion.
Finally, there is the your age in bonds rule, telling us how much of an investment account should be in fixed income at a given time.
Last week, the Dow Jones Industrial Average (“The Dow”) cracked the 20,000 point mark. It’s fun and exciting, and it’s seemingly and indication that the stock markets and economy are doing well. Or at least that’s what financial media purports.
So, what does the Dow reaching this level actually mean? Well, in truth, very little. The Dow, as a benchmark, is an archaic, arbitrary bellwether of the US economy. The Dow is a bad index.