Three Years After, the Dow Has Gained Back its Losses

In March of 2009, things seemed grim for the stock market. From the last quarter of 2008 to March of 2009, the Dow was in a free fall, thanks in large part to the banking/housing crisis. On March 9 of 2009, the Dow was at 6,547. Today it is at 12,922, and it has gained back 97% of what it had lost. Many people were not in the buying mood in March of 2009 but that was a great time to buy. No doubt, many probably liquidated their 401k accounts, which is the worst thing they could have done. Kiplinger's magazine talks about 10 stocks that have surged since the 2009 bottom. The maker of the Sleep Number bed has been an amazing success story. Their stock (SCSS) has surged a staggering 12,000% in the past three years, going from 25 cents per share to $30. That company has been able to shed its debt load. Another success story is Pier One Imports (PIR). That stock has risen 11,000%, from 11 cents to $17.20.

For more success stories, check out the link:

http://kiplinger.com/columns/picks/archive/10-stocks-that-surged-since-the-market-bottomed.html

A Rebound in the Dow is a Positive Sign

Today the Dow Jones Industrial Average hit the 13,000 mark for the first time since May of 2008. Unemployment numbers are down, housing sales are up, so the Dow responded to positive economic signs. If things are cleared up in Europe concerning their financial woes, the Dow could go above its all time high of 14,164, and keep climbing. That all time high happened in 2007, before the housing/banking crisis crippled the economy. All of this is more proof that the market is resilient, but it just takes time to gain back what was lost. Most Americans have lost a good portion of their retirement accounts due to the blue chips' tumble the past few years, but things are headed in the right direction.

* Some information from CBS News.

The Stock Market's Resiliency

The housing/banking crisis of late 2007 to early 2009 was a devastating blow to the US economy. On October 1 of 2007 the Dow Jones Industrial Average ($INDU) was at 13,930. Then the free fall began, and by March 9, 2009, the Dow had plunged to 6,547, losing more than half of its value. But, little by little, the market recovered, taking us to today, where the Dow is 12,653, making back almost all of the ground it lost during the banking crisis. That is why experts put their faith in the power of stocks as investments. It takes time, but the market is resilient, and it does come back eventually. Many people saw their portfolios cut in half from 2007 to 2009. Those who are retired or close to retirement hopefully had a large percentage of their investments in something safer than stocks, like bonds. At the depths of the crisis of 2009, some probably got discouraged with the Dow and withdrew their investments. This is the worst thing that a person could have done. Just think about how many blue chip stocks were at bargain prices at that time. That would have been the time to buy like never before.

Since 1980, the growth of the Dow has been nothing short of amazing, when compared to the sluggish overall rise that happened during previous decades. From 1980 to today, the Dow has multiplied over 14 times! Consider these figures, showing the value of the Dow:

1-1-1930..... 267
2-1-1940..... 146
1-1-1950..... 201
1-1-1960..... 622
1-1-1970..... 744
1-1-1980..... 875
12-1-1989..... 2,753
11-1-1999..... 10,877
10-1-2007..... 13,930


How long before it hits 15,000? Stay tuned.

*Some information from money.msn.com.