Dow 30K Could Be the Best Gift This Christmas
I love this time of year.
On top of the holiday festivities, it’s also the time of year when we learn whether our bold predictions have come true or if they missed the mark.
I’m proud to say we’re inches away from one of our biggest predictions coming true.
Let’s dive right in.
Riding the Market Vomit Comet to Big Wins
2019 was a rough year for many investors. The trade war and political strife across the globe have kept us on our toes.
Despite this, one of my boldest early year predictions is about to finally come to true.
The Dow sat less than 1,500 points away from hitting 30,000 points before the Christmas holiday.
Back in February I said:
A low unemployment rate is an indicator of economic expansion, and that tells me the path of least resistance for the stock market is higher from here, not lower. Perhaps the Dow even hits 30,000 by year-end!
We got the low unemployment numbers we were hoping for and I think with Santa’s help we have a real shot at the Dow hitting 30K by year’s end.
What Does Santa Have to Do With It?
There’s plenty of heavy-set old men on Wall Street. But none have the power to spark a rally in December like good ol’ St. Nick.
According to the Stock Trader’s Almanac, a Santa Claus rally is a calendar effect that involves a rise in stock prices during the last five trading days in December and the first two trading days in the following January. The average gain during this time frame is 1.4%. This wouldn’t get the job done, but after last year’s December 26, 1,000 point rally there’s a decent chance stocks could gain the 3-4% they will need to push the Dow to 30,000.
Historically speaking, the Santa Rally posts gains 76% of the time dating back to the 1950s so I like our odds.
Stay invested, Dow 30K is coming fast!
And I hope you had a very merry Christmas and a happy holiday!
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch