NASDAQ Finally Climbs Back to 5,000
Everyone seems to have been waiting with baited breath for the NASDAQ to finally climb back to 5,000, a level not seen since it collapsed 15 years ago. So now we're there. Huzzah!
When looking at trends, an index rising back to a previous level is significant. Breaking through a "big" number - like 5,000 - is significant too, if only for psychological reasons. So it's not unreasonable to expect this "breakout" to continue. Don't be surprised if the NASDAQ surges upward in the coming weeks, if not months.
But with all that, we ought to always use our reasoning to discern just how significant this really was. And a simple way to understand this rise to and through 5,000 is to compare 5,000 in the year 2000 to 5,000 in this year of 2015. Using the BLS Inflation Calculator, which seems to be as good as any other out there, we find that, factoring in inflation since 2000, the NASDAQ would have to do a bit more work and rise another 35.7% to 6,875 to achieve a level equivalent to 5,000 in the year 2000. That's a big bump up.
What's it all mean. Well, for one thing, don't get swept up in the emotions of the media as it concocts this "dramatic" story. Remember they get paid if you pay attention. On the other hand, you can certainly use these levels to try to ascertain the direction of current trends. There's some relevancy in that.
So no need to get overly excited or overly sour and skeptical. Just get the facts, face them, and move on. While the truth can hurt sometimes, it's usually a temporary thing. In the long run, the truth will win out, so why not look for it and stick to it? And the truth is that the devastation of 2000 in the NASDAQ has by no means been fully repaired. People lost a ton of money and - unless they owned more than the tech babies that grew up in the 90s and were slaughtered in the early 2000s, they were and remain - to use a technical term in finance - screwed. You, of course, not having your eggs in the fantasy-land of 1990s tech stocks should be doing OK, right?
When looking at trends, an index rising back to a previous level is significant. Breaking through a "big" number - like 5,000 - is significant too, if only for psychological reasons. So it's not unreasonable to expect this "breakout" to continue. Don't be surprised if the NASDAQ surges upward in the coming weeks, if not months.
But with all that, we ought to always use our reasoning to discern just how significant this really was. And a simple way to understand this rise to and through 5,000 is to compare 5,000 in the year 2000 to 5,000 in this year of 2015. Using the BLS Inflation Calculator, which seems to be as good as any other out there, we find that, factoring in inflation since 2000, the NASDAQ would have to do a bit more work and rise another 35.7% to 6,875 to achieve a level equivalent to 5,000 in the year 2000. That's a big bump up.
What's it all mean. Well, for one thing, don't get swept up in the emotions of the media as it concocts this "dramatic" story. Remember they get paid if you pay attention. On the other hand, you can certainly use these levels to try to ascertain the direction of current trends. There's some relevancy in that.
So no need to get overly excited or overly sour and skeptical. Just get the facts, face them, and move on. While the truth can hurt sometimes, it's usually a temporary thing. In the long run, the truth will win out, so why not look for it and stick to it? And the truth is that the devastation of 2000 in the NASDAQ has by no means been fully repaired. People lost a ton of money and - unless they owned more than the tech babies that grew up in the 90s and were slaughtered in the early 2000s, they were and remain - to use a technical term in finance - screwed. You, of course, not having your eggs in the fantasy-land of 1990s tech stocks should be doing OK, right?
Comments