On the floor of the New York Stock Exchange, at the offices of investment brokers, and in corporate boardrooms throughout the country, there were hearty celebrations on Wednesday morning as an artificial number hit an arbitrary target.
Yes, the Dow Jones Industrial Average finally hit 20,000 on Wednesday, after what seemed like an interminable wait…of a few weeks.
People doffed cheap embroidered hats. They popped Champagne. Frivolity was the order of the day.
But for the rest of us, the Dow hitting 20,000 doesn’t mean a damn thing.
Did the disenfranchised masses in this country care?
Do you think that most of the people that voted for Donald Trump care about #Dow20K? What about the people that took part on the Women’s March across the country this past weekend?
Do you think their cares and fears disappeared when the Dow hit 20,000? Nope.
Guess what happened to most Americans when the Dow hit that meaningless target?
Their life didn’t change one bit. Their days didn’t get any easier. Their concerns didn’t magically melt away. Life moved on without so much as a flicker.
For most people, Dow20K is just an excuse for rich people to continue celebrating how rich they are.
Because here’s the thing about the stock market, it’s not a real indicator of the health of the economy or the well being of the people of this country.
Why? Because a lot of them don’t own a single stock, let alone enough to make a damn bit of difference in their lives.
According to the most recent data I could find (and if you can find more recent data, please let me know), nearly half of all American adults DO NOT own stock. Not a single one.
According to Gallup’s data, that ties the lowest figure on record in their poll, which stretches back to 1999.
That leaves 48% of people who don’t own stock. And therefore don’t care about the Dow hitting 20,000, or any other arbitrary target the stock-watching world sets.
Look, I get that investing in the market makes some sense in the long-term.
I mean, look at this chart. This is the Dow over the last 10 years. Despite that rather large drop in 2009, the trend line for the Dow is obviously pointing up.
I get investing for the long-term, but that’s dependent on people having money to use for investing.
It also depends on people’s willingness to ride out the waves that come with the stock market.
Sure, it’s at 20,000 today, but it won’t stay there forever. There will be drops. There might be another crash.
Do people have enough stomach to fight through another crash if their retirement suddenly disappears…again?
On the positive side, the population’s direct exposure to the stock market is obviously less than it’s been in the past.
According to the Gallup data, 65% of adults owned stock in 2007, and guess what happened after that.
So I guess it could be worse. So, yeah, drink your Champagne and wear your cheap hats and celebrate the day away.
Sure, Wednesday is a banner day for the Dow, but the rest of us, it’s just Wednesday.