A Special Type of All-Time High

Another round number in the record books

The Dow Jones Industrial Average did something today that it’s never done before. It crossed 40,000.

The index, first created in 1896, combines the strongest businesses in the United States. Unlike the S&P 500, it isn’t dominated by mega cap tech stocks. Microsoft is the only Mag 7 company in the top ten holdings. Surrounding it are companies like Caterpillar, Home Depot, McDonald’s, and American Express.

The incredible return that investors have earned in stocks over the last decade-plus wasn’t easy. Okay, maybe 2017 was. But outside of that, the returns came with a price. There have been thirty different 5% pullbacks since the bottom in 2009. You had to be able to endure discomfort at best and terror at worst

I don’t know where the index goes from here, but I know that pullbacks, corrections, and bear markets are coming. Getting through them requires an unwavering belief that these companies will continue to earn more money and their investors will be rewarded in the end.