Dow still slow and steady even after 15,000
UNDATED – The Dow jumped to over 15,000 by the closing bell Tuesday, but does that mean it is a first glimpse at a broad economic recovery? Rick Wible of REW Financial in Lewisburg says the milestone is positive, but it is still important to be cautious.
“The Dow is 30 companies, so you can’t entirely go by that as an indicator for where the economy is going,” says Wible. “Fortunately, you have the S&P 500, which is also at an all-time high. Things are looking up, but still be careful, because sectors change all the time; what may be the best one year, may be the worst the following year. You have to be diversified for sure.”
Wible says the rally to 15,000 does not mean investors should buy in and shut their eyes. “If you are on the sidelines waiting, I don’t know that I would jump all in at once. You can take advantage of certain things, but you do not want change returns that have already been made. It is not a matter of if the federal stimulus will end, it is when it will end.
Wible says slow and steady growth is the name of the economic game. He reiterates something investor Warren Buffett said in a recent interview; that there are broad increases in each of Buffett’s 70 businesses that he owns directly. Wible says, to him, that means things are looking good.
The Dow’s rise to 15,000 is a nearly 15% increase since the first of the year. The S&P 500 closed with a record 1,625.95 Tuesday, which is a 14% increase since the beginning of the year. (Sara Bartlett)