Here We Go With The DOW Again

[Johnny2X2X]

43. The DOW is not a stand in for the economy

Heck, it's not even a good stand in for how the stock market is doing. The DOW is based on 30 companies, it usually follows trends, but it's not somethiing finance people follow all that much. S&P 500 is what most in fanance will quote first.

S&P is flat today, DOW is up 1/2 point.

And it's even more meaningless to the average person and their 401K. Your 401K is risk mitigated, you have time to make back losses or if you're close to retirement your blend is away from equities so it's not a massive impact.

No one has lost their retirement because the DOW is down 10%. Very few have even lost 10%, and those that did are probably 20 years from retirement so it will all come back and then some.

What the DOW, or S&P can be a valuable tool for is gauging the overall health of companies and thus the economy. And that's what matters in the end, jobs matter in the end. Growth matters because if it's low or negative, people will start to lose their jobs. And you know who does lose their retirement? Peopple without jobs. People who are unemployed stop saving since they don't have a paycheck to put part of into their 401K. So they stop growing their 401Ks, and they miss out on buying low if the markets are down because of a recession. And other people, who are unemployed for long periods of time, end up dipping into their 401Ks to stay afloat. Those are the consequences that matter for everyday people.

And the ultra rich? They don't care about the DOW either, they don't even care much about their stock prices right now, because they've installed Trump to deliver to them in the end. They are williing to endure some instability in order to remake the country into one with a much more terrified and insecure workforce they can exploit to become even richer in the end.