The Dow Jones Industrial Average (DJIA) isn’t a very useful index. The S&P 500 is a better way to track big US companies and better for most purposes is to use a total market index which includes another 3500 other US public companies. Okay, now that we resolved that issue, I ran across a fascinating table today, it covers how long it’s taken to go from one DJIA milestone to the next:
| CLOSING THRESHOLD | DATE CLOSING THRESHOLD REACHED | TRADING DAYS BETWEEN THRESHOLDS | CALENDAR DAYS BETWEEN THRESHOLDS |
|---|---|---|---|
| 300 | 12/31/1928 | ||
| 400 | 12/29/1954 | 6,494 | 9,494 |
| 500 | 3/12/1956 | 303 | 439 |
| 600 | 2/20/1959 | 742 | 1,075 |
| 700 | 5/17/1961 | 564 | 817 |
| 800 | 2/28/1964 | 699 | 1,017 |
| 900 | 1/28/1965 | 231 | 335 |
| 1000 | 11/14/1972 | 1,940 | 2,847 |
| 2000 | 1/8/1987 | 3,573 | 5,168 |
| 3000 | 4/17/1991 | 1,080 | 1,560 |
| 4000 | 2/23/1995 | 975 | 1,408 |
| 5000 | 11/21/1995 | 189 | 271 |
| 6000 | 10/14/1996 | 226 | 328 |
| 7000 | 2/13/1997 | 85 | 122 |
| 8000 | 7/16/1997 | 105 | 153 |
| 9000 | 4/6/1998 | 182 | 264 |
| 10000 | 3/29/1999 | 246 | 357 |
| 11000 | 5/3/1999 | 24 | 35 |
| 12000 | 10/19/2006 | 1,879 | 2,726 |
| 13000 | 4/25/2007 | 127 | 188 |
| 14000 | 7/19/2007 | 59 | 85 |
| 15000 | 5/7/2013 | 1,460 | 2,119 |
| 16000 | 11/21/2013 | 139 | 198 |
| 17000 | 7/3/2014 | 153 | 224 |
| 18000 | 12/23/2014 | 120 | 173 |
To go from 2,000 to 3,000 took 14 years but to go from 11,000 to 12,000 took about a month. The milestones tend to drive news coverage but they aren’t very meaningful. Adding 1,000 to the Dow is a lot easier now than it was early on. Going from 17,000 to 18,000 requires a 5.8% increase, whereas as going from 2000 to 3000 required a 50% increase. We’d be better off to focus on percentage returns than milestones. Either way, the best approach is to keep investing routinely and avoid being out of the market so that when these bursts come, we gain the benefits.