When I was a young guy, there were predictions of doom based on the Dow Jones Industrial Average.
Weirdly, it is still discussed in media reports every single day, even though it doesn't tell us anything at all about peoples' lives.
Do most Americans feel like the economy is doing well, even though the DJIA has gone up a lot? The president certainly claims the economy is better now than when he came into office, even though outside government, unemployment is still really high, and if we factor in the full-time jobs that are now part-time and people no longer on unemployment because they have been on it too long, things look really bad.
But politicians engage in spin. For the rest of us, let's remember that benchmarks like that do nothing but tell people they have been left behind, even if they haven't.
Cullen Roche at Pragmatic Capitalism reminds us that stocks are only 15 percent of the average household net worth. Bonds are actually a lot more but no one talks about the bond market when it comes to barometers of economic health.
It just doesn't tell us much that is meaningful and even worse may be comparing the success of an index versus the S & P 500.
Can we All Agree to Stop Comparing Everything to the S&P 500? By Cullen Roche
