This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cramer: The Dow's Big Round Number

This post from Jim Cramer's blog originally appeared Feb. 21 at 11:55 a.m. ET on RealMoney.

NEW YORK ( RealMoney) -- Does Dow 13,000 matter? You bet it can. I hear tons of people talk about how what matters is the S&P 500 and taking out the April high of last year. Sure, I would love that. It would break the double top pattern, and investment professionals know that the S&P is what matters, not the Dow, because it is a much broader gauge of the stock market. When I ran money, I led every performance letter with how I did against the S&P. When I compare how my charitable trust is doing, I always match it against the S&P.

But the simple truth is that the retail investor, the home gamer, cares tremendously about how the Dow is doing, and when the Dow takes out key milestones, it is a much bigger deal than how the S&P 500 does.

Why does it matter so much to the actual performance of the market? Because the main attribute of this stock market rally is that it is happening with very few investors aboard. This morning, Ann Curry from the "Today" show asked me a terrific question, about whether the Dow taking out highs means anything for anyone other than rich people.

You know what? That's a difficult question. Rich people are heavily invested in the stock market as well as the bond market, especially municipal bonds. They do stand to do much better than the regular investor who can't really afford to have a big stock portfolio.

However, 90 million households are touched by the stock market in some fashion, through pension plans, 401(k)s, IRAs and college savings plans. The stock market has been a disaster for these smaller savers. For many, stocks are a con job, something that takes your money away and gives it to the rich. So Curry's inquiry is a smart one.

But here's my answer, though. Yes, we have had a dozen-year lost decade for stocks. They have been miserable for that long. However, in the 1980s and 1990s, stocks made regular people fortunes. We had well superior returns to bonds. Who is to say it can't happen again?
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AEP $53.28 0.59%
AA $11.08 -0.63%
BAC $17.22 1.18%
FUN $54.63 0.26%
WM $46.51 0.35%

Markets

DOW 17,757.91 +138.40 0.79%
S&P 500 2,077.42 +14.31 0.69%
NASDAQ 5,013.1230 +26.2560 0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs