Dow 20,000 and 5000 – which one first?

The India Daily speculates that a Dow 20,000 may be just as probable as a Dow 5,000.

with the economy fully employed, many borrowing from their 401ks to keep up with their standard of living because of low income jobs, all the while corporations cutting jobs, deflation seems to be in the bigger picture here.

“Something interesting has happened to the stock market. It is acting like the bond market. The VIX volatility index is low. The dividend paying stocks are outperforming the growth stocks. The new dividend tax law has created this massive dilemma for stocks. The market knows very well the fact of deflation. That is why Nasdaq is stuck below 2400 and Dow is making new highs.

Indeed it has. Although a decline of over 70% in the stock market may seem quite dramatic, a decline of 40-50% has occurred quite a number of times over the decades. This time may be no different.

India Daily
February 20, 2007



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