Rushville Republican

Business

June 11, 2013

What does Dow 15,000 mean to you?

RUSHVILLE — This month, the Dow Jones Industrial Average hit a milestone, when, for the first time, it closed above 15,000.  Of course, 15,000 is a nice, round number, and it sounds pretty big - but what does it mean to you, as an individual investor? Is it cause for celebration - or is it more of a “caution” flag?

There’s no one simple answer to these questions. Since March 2009 - the low point of the market following the 2008 financial crisis - the “Dow” has risen about 130 percent. And while the Dow is just one index, it’s nonetheless an important measure of the market’s performance - which means that you were likely glad to see the 15,000 mark eclipsed and you’d be happy if the numbers just kept rising.

However, as you’re no doubt aware, the market does not move in just one direction. Typically, declines of 10 percent or more - or “corrections” - occur about once a year. Unfortunately, they’re not predictable. Sooner or later, the markets will indeed change course, at least for the short term. When this happens, don’t panic - corrections are a normal part of the market cycle. Still, you might feel like you should do something to cope with the downturn. But what?

Here are a few suggestions:

Keep investing - Too many people, when faced with a market drop, decide to “cut their losses” and take a “time out” from investing. But that can be a costly mistake - had these investors bailed out of the market in 2009, and only recently returned, they would have missed a substantial part of that 130 percent run-up in the Dow. And when you invest in a down market, your dollars may actually go farther if the market rebounds, because you would have bought more shares at the lower prices.

Review your portfolio - It’s usually a good idea to review your portfolio at least once a year, and it may be especially important during those times when the market changes directions. Over time, a portfolio can become unbalanced - for example, following a long period of rising prices, some of your growth-oriented investments may have gained so much value that they now take up a larger percentage of your holdings than you had intended, possibly subjecting you to a greater level of risk than you desire. If this happens, you may need to scale back on these investments and reallocate the money elsewhere.

Diversify - Always look for ways to spread your dollars among a range of vehicles - stocks, bonds, government securities, certificates of deposit (CDs) and other investments. Even within these classes, look for ways to diversify further, such as owning different types of stocks, bonds of varying maturities, and so on. Diversification can’t guarantee a profit or protect against a loss, but it can help reduce the impact of volatility that can occur in a downturn.

The Dow at 15,000 is certainly no minor event. And since stocks don’t appear too expensive compared to their earnings, don’t be surprised if higher milestones follow. But record highs can be quickly forgotten when the market falls. By being prepared for that day, too, you can help yourself continue to work toward your goals - even when the major market indices have, for the moment, taken a wrong turn.

Brian Humphrey is a financial consultant and investment advisor.

 

1
Text Only
Business
  • bus-rv080114-citizens pic Citizens State Bank expands local team Citizens State Bank has announced Samantha Coon as a new teller who will serve the Rush County market. She will be working at our Rushville branch located at 1802 N. Main St., Rushville. She brings a tremendous amount of team building and customer se

    August 1, 2014 1 Photo

  • Edward Jones Moves Up on the FORTUNE 500 List RUSHVILLE - Financial services firm Edward Jones moves up on the annual FORTUNE 500 list, as published by FORTUNE magazine, in its second appearance in two years, according to the following Rushville area Edward Jones financial advisors: * Brian D Hu

    June 13, 2014

  • bus-rv061314-fussner release pic Fussner completes 2nd year at Institute for Organization Management WASHINGTON, D.C.-- Institute for Organization Management, the professional development program of the U.S. Chamber of Commerce Foundation, is pleased to announce that Sandy Fussner, Executive Director of the Rush County Chamber of Commerce, has recen

    June 13, 2014 1 Photo

  • U.S. businesses boost April stockpiles 0.6 percent WASHINGTON (AP) -- U.S. businesses increased their stockpiles in April by the largest amount in six months, signaling business optimism that future demand will keep rising. Business inventories rose 0.6 percent after a 0.4 percent March gain, the Com

    June 13, 2014

  • Farm Credit schedules ribbon cutting RUSHVILLE - Farm Credit Mid-America, an agriculture lending cooperative serving farmers, rural residents and agribusinesses throughout Indiana, Ohio, Kentucky and Tennessee, will hold a ribbon cutting ceremony on May 29 for their new office in Rushvi

    May 16, 2014

  • Purdue NExT online learning program launches global website, now open to individuals, businesses, industry WEST LAFAYETTE -- Purdue NExT, an online interactive learning program, has launched its global website, offering 25 new classes. Purdue NExT is an outgrowth of PurdueHUB-U, an online education initiative announced in 2012. It is based on HUBzero, a p

    April 25, 2014

  • Student business competition announces finalists, Demo Day presentations WEST LAFAYETTE - Three Purdue University student-based startups have advanced to the final round of the Boiler Mini-Accelerator Competition or "Boiler," where they will compete for nearly $10,000 in funding. The Boiler, a student-run business competi

    March 28, 2014

  • Congressman Messer honors training program Congressman Luke Messer has made it a matter of Congressional Record that he strongly supports the Manufacturing Matters fast track training program in Rush, Wayne, and Fayette counties. In the Congressional Record dated Feb. 25, 2014, he congratulat

    March 14, 2014

  • bus-rv022814-citizens bank pic Citizens State Bank recognizes 2013 award winners Citizens State Bank held their annual employee awards presentation on Feb. 17, 2014, at a companywide training day. The Pendleton branch was awarded Branch of the Year for their overall performance. Employees from this branch are Alexa Chamberlin, St

    February 28, 2014 1 Photo

  • Wal-Mart offers weak outlook on sales shortfall NEW YORK (AP) - Much like its low-income shoppers, Wal-Mart can't seem to catch a break as the U.S. economy rebounds. The world's largest retailer on Thursday posted a 21 percent drop in fourth quarter profit and gave a subdued forecast for the curre

    February 21, 2014