C.O.L. blowhard of course couldn't bother to tell us how this is a figment of the imagination...

Talk about embarrassing yourself.

?

Ah, yes, with the world population going up, the market will be bigger and bigger and trading numbers will tend to follow population growth.

So why didn't it fall with the population when the babyboomers passed their prime and the Gen Xers came of age? ((((Which, btw would have been during the 90s... hmmmm)))

That is not to say that you are completely wrong, population does have its effect on the stock market. But "world" population has very little effect. The only population that does effect the stock market is the part of the "world" population that chooses to invest in the stock market. So, while more people in the world does increase the number of potential investors, only those who actually invest play a siginificant enough roll to effect the Dow Jones.

Once again, what should be considered great news falls victim to pessimistic negativism.

I, for one, relish such news about investments in our great nation and healthy economy!!!

RUSH: Yesterday, the Dow Jones Industrial Average crossed the barrier 11,000. The media has a way of describing this. We have put together a montage: Fox News Channel, ABC News, CBS News, CBS This Morning, CBS, NBC. Note here, there's a single word that all of these anchors and info babes and reporters used to describe the Dow breaking 11,000. CHRIS WALLACE: We certainly understand it to be an important psychological mark. REBECCA GOMEZ: It's a psychological milestone. MELLODY HOBSON: There's nothing magical about 11,000. It's more psychological. BOB SCHIEFFER: Wall Street reached a psychological milestone today. HANNAH STORM: Big psychological barrier. LIZ SONDERS: It's certainly more a psychological milestone. KATIE COURIC: The Dow is opening today above a very important psychological milestone, the 11,000 mark. Is it time now for you to put more money in stocks? RUSH: It's a psychological mark? It's a psychological milestone? When we get, what, 1,000 and then 2,000 soldiers deaths in Iraq, those are real, those are grim. Those aren't milestones, those are real, and there's nothing psychological about them, but here's the Dow at 11,000 for the first time since 9/11, and it's psychological. All this is an attempt to downplay the success of the economy. It's laughable. It's the same word. Somebody sends the fax out from somewhere to the media, and they all repeat it. You didn't have to watch one network to hear that report. You could have watched any one of them. It didn't matter which one you chose. They were all reporting it the same way. "A psychological barrier has been broken. The psychological barrier has been reached. It's nothing but a psychological barrier. Should we put more money in stocks?" Katie, why don't you tell people what you do with your multiple millions. You sit there and act like you're getting to work here in a Toyota Prius. Why don't you tell people what you do with your millions. "Well, I'm a journalist. What I do is irrelevant." I know.

Any Econ. majors around?

Yes, do you have a question?

My point in bringing this up is that looking at the stock market is not an end-all, be-all indicator, nor even a reliable one of a nation's economy. It is particularly incorrect for anyone to use it as an indicator of the success or unsuccess of all Executive policy matters.

And you would be correct.  However, my IRAs and 401ks are greatly affected by the NASDAQ and Dow, so I feel better when they are doing well!  As are a majority of workers since most retirement plans are now invested in the Stock Market.

Remember the book Dow 36000? Looks like we're back on the path.

However, my IRAs and 401ks are greatly affected by the NASDAQ and Dow, so I feel better when they are doing well!

As are mine, because they are index funds linked to the overall market. YAY DOW!

Dow falls 5 point, we are done for, Dow goes up 5 point, big deal. Is this how people really think? How exactly did this country become one of the most if not the most powerful country in the world with mentalities like this? It's almost as if somehow the dumb people have finally won one against the smart ones.

Dow Jones Industrials Cross 11,000

That's incredible! So if you had invested $50,000 when Bush took office in 2001, you'd now have... let me get out my calculator... you'd now have... $50,000!!!

Dow falls 5 point, we are done for, Dow goes up 5 point, big deal. Is this how people really think?

That's how liberals think.

Dr. Guy, would you give us the Econ. major's perspective?

You have it pretty much correct.  The Dow is not even indicative of the market in general, just 30 blue chips.  The S&P is a much better indicator of how the market is doing.  But the market is an indicator of the over all feeling of investors (who as we saw with the dot com crap is not always right).  When the market is advancing, as it is, the investors feel the economy is doing well and that the companies will ride the economy to bigger and better profits.  So in that respect, it is a lagging indicator of expectations, but often a leading indicator of the performance of the economy as you do not want to get in on a stock at its peak, but rather as it begins its assent.  And unlike most of us, these investors (the good ones) do not pay attention to headlines, they dig for the numbers underneath to make their buys and recommendations.

While the strength of the market is a positive influence on consumer confidence, that is about all it is.  But if you are going to watch the market to gauge the economy, you will always come up short because often the market is still rising, when the economy has already started to weaken.  Catch it on the upswing (knowing the difference between an upswing and a short blip is important and damn near impossible), and you can retire in no time!  Mis time your jump into the market, and you are going to be that 80 year old Wal Mart Greeter.

Thanks for the professional view, Dr. Guy, that should help anyone with a misunderstanding of the basics of the market, or at least, bring things into tighter focus for those not 'in the know'.