Another thousand Dow points higher, and investors yawn

Market milestones falling like dominoes, with 51 records broken so far this year

Oct 19, 2017 @ 1:42 pm

By John Waggoner

Not so long ago, phones would light up in an adviser's office when the Dow Jones Industrial Average broke through a 1,000-point barrier as customers clamored to invest. Today?

"Crickets chirping," said Steve Janachowski, CEO of Brouwer & Janachowski. "People seem complacent, and if anything, wondering if the market's overvalued and ready for a fall."

Of course, a 1,000-point gain in the Dow isn't what it used to be. It took the blue-chip index 76 years to break 1,000 points in 1972. It didn't break 2,000 until 1987, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Milestone fatigue could be setting in. The Dow blasted through 23,000 Wednesday with a 160.16-point gain, closing at 23,157.60. It broke through 22,000 in August, 21,000 in March and 20,000 in January. The Dow has set 51 new record highs this year.

Each 1,000-point gain is, of course, a smaller percentage gain from the previous one. When the Dow crossed 15,000 in May 2013, it had gained 7.54% from its first close above 14,000 in 2007.


And the stock market has come a long way from its bear-market low of 6,547.05. "People have already missed out, and, by and large, they know it," said David Haraway, principal at Substantial Financial, Inc.

(More: Searing lessons from the crash of 1987)

"We really haven't had folks clamoring to get in," said Mark Bass, financial planner with Pennington, Bass & Associates. "If anything, our folks are more interested in adding to asset classes that are negatively correlated or non-correlated with stocks, such as bonds, managed futures, maybe real estate."

Mutual fund flows seem to prove investors' wariness. Investors have yanked an estimated $50 billion from domestic stock funds and ETFs this year, according to the Investment Company Institute, the funds' trade group. Bond funds and ETFs have welcomed $320.7 billion in net new cash during the same period.


"The mutual fund equity outflows seem to confirm that there's more fear or risk-aversion than greed," Mr. Janachowski said. "I don't think investors in general buy into this up market. There is a general sense — maybe mostly because of the discord in Washington — that the upturn has been artificially market-driven and not based on fundamentals."

Not everyone is watching paint dry instead of the market.

"We have been getting a lot of new inquiries in the past couple of months and I think it is due to the strong performance in the market," said Alexander Rupert, associate portfolio manager at Laurel Advisors. "Either people are hearing the news about how strong the markets have been or people are looking at their statements, seeing more gains than they are used to and wondering if they are being smart when it comes to their finances."


What do you think?

View comments

Recommended for you

Featured video


4 secrets to adviser growth: Client experience

The client experience is critical for firms to thrive today. This is especially true for your wealthiest clients. SEI's John Anderson and Allie Carey offer some strategies for success.

Latest news & opinion

Top 10 RIAs in the South

These are the largest registered investment advisory firms in the Southern U.S., based on AUM.

Top 10 RIAs in the Midwest

These are the largest registered investment advisers in terms of AUM in the Midwestern U.S.

Top 10 RIAs in the Northeast

These are the largest registered investment advice firms in the Northeastern U.S., in terms of assets under management.

10 predictions for financial advice in 2019

Deloitte expects these 10 changes will hit the financial advice business in 2019.

Midwestern magic? RIA assets soared nearly 30% there last year

Theories for what's driving the growth spurt abound, but it surpassed all other regions of the country.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print