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A Tale of Two Stock Market Hats: It Was the Best of Times, It Was the Worst of Times
Understanding Stock Market Volatility
These two hats tell the story of stock market volatility. On March 29, 1999, during what is now called the Dot-Com Bubble, the Dow Jones Industrial Average first crossed the 10,000 mark. On October 9, 2007, it hit a then-record 14,164, just before the Global Financial Crisis sent stocks crashing, dropping the Dow to below 6,600 by March 2009, before a major recovery. On January 25, 2017, the Dow first broke the 20,000 mark. It had taken 17 years for the Dow to double. Using the crude rule of 72 (divide 72 by the number of years to double to get an average annual return), that’s a 17-year annual capital gain of about 4.2 percent.
Around that time, in 2017,my son got me the custom-made Dow 20,000 hat, which I wore proudly. The Dow continued upward, as if it would never look back, hitting a record high of 29,551 on February 12, 2020. The Dow was on what seemed like an easy path to surpassing the 30,000 mark. But suddenly and unexpectantly, Covid hit shortly afterwards. On March 18, 2020, the Dow once again broke through the 20,000 mark, but this time…
