Dow Jones Industrial Average up 30% from March 9 low. Is this a sucker's rally?

[Brainonska511]

My index funds are about, or just above, where they were in October of '08 at this point (so still a little negative from years of buying in at higher prices, but average loss has dropped as I also bought when it was cheap). The only things that are positive are funds that I started up this year. Overall, no big deal - I'm 21 and have ~40+ years till retirement and almost all that money is there for long term growth.

 

[Engineer]

Originally posted by: blackangst1

Originally posted by: Skoorb

Originally posted by: blackangst1
I dollar cost average, and this last 9 months has been awesome for me. I never got out. In fact, I upped my buys by 15% last Dec.

Of course if you start at the bottom and keep buying long you'll do well.

I buy no matter what the market does 😉 That way I always come out ahead.

So do I. Have been since 1995. My account is "STILL" worth less than what I have put in it.

Edit: Just looked - I might be about break even again or pretty close to it. Have moved some of more of my investments to bonds over the last few weeks including another 4% on Thursday of last week.

 

[fskimospy]

In order to think that the Dow was correctly priced at 6800 requires you to believe that no new wealth had been created since 1965 or so. (the Dow was at about 950 in 1965, which is about 6600 in 2009 dollars.) It's pretty reasonable to say that the Dow was massively undervalued, so in my opinion no, it's not a sucker's rally.

 

[blackangst1]

Originally posted by: Engineer

Originally posted by: blackangst1

Originally posted by: Skoorb

Originally posted by: blackangst1
I dollar cost average, and this last 9 months has been awesome for me. I never got out. In fact, I upped my buys by 15% last Dec.

Of course if you start at the bottom and keep buying long you'll do well.

I buy no matter what the market does 😉 That way I always come out ahead.

So do I. Have been since 1995. My account is "STILL" worth less than what I have put in it.

Edit: Just looked - I might be about break even again or pretty close to it. Have moved some of more of my investments to bonds over the last few weeks including another 4% on Thursday of last week.

Im sorry to hear that 🙁

 

[blackangst1]

Originally posted by: eskimospy
In order to think that the Dow was correctly priced at 6800 requires you to believe that no new wealth had been created since 1965 or so. (the Dow was at about 950 in 1965, which is about 6600 in 2009 dollars.) It's pretty reasonable to say that the Dow was massively undervalued, so in my opinion no, it's not a sucker's rally.

Holy shit we agree :beer:

 

[Craig234]

Originally posted by: eskimospy
In order to think that the Dow was correctly priced at 6800 requires you to believe that no new wealth had been created since 1965 or so. (the Dow was at about 950 in 1965, which is about 6600 in 2009 dollars.) It's pretty reasonable to say that the Dow was massively undervalued, so in my opinion no, it's not a sucker's rally.

I'm always suspicious of those 'adjusted dolllar' figures when they're sort of apples and oranges - do the 'adjusted dollars' really account for all new wealth, or just living costs?

But there are other factors too - weren't we the world's larest creditor in 1965, with a small national debt, while we've massively increased that debt the last 25 years?

I think the issue in a 'sucker's rally' isnt' comparisons to historic pricing levels, but looking at the pros and cons, the strengths and risks the market has coming up now.