Stock Market Sets Record…But

There has been a lot of talk about the stock market.  Clearly we are seeing highs and most people, even the optimists thought it would have taken a lot longer to get here.

If you are looking at the numbers and asking when is it going to end, take a look at this…

It’s from Wikipedia.

I think this puts it into perspective.  Just substitute North Korea, Iran, or Russian for the countries.

In late 1985 and early 1986, the United States economy shifted from a rapid recovery from the early 1980s recession to a slower expansion, resulting in a brief “soft landing” period as the economy slowed and inflation dropped. The stock market advanced significantly, with the Dow peaking in August 1987 at 2,722 points, or 44% over the previous year’s closing of 1,895 points. Further financial uncertainty may have resulted from the collapse of OPEC in early 1986, which led to a crude oil price decrease of more than 50% by mid-1986.[2]

On October 14, the DJIA dropped 95.46 points (3.8%) (a then record) to 2,412.70, and fell another 58 points (2.4%) the next day, down over 12% from the August 25 all-time high.

On Thursday, October 15, 1987, Iran hit the American-owned (and Liberian-flagged) supertanker, the Sungari, with a Silkworm missile off Kuwait’s main Mina Al Ahmadi oil port. The next morning, Iran hit another ship, the U.S.-flagged MV Sea Isle City, with another Silkworm missile.

On Friday, October 16, when all the markets in London were unexpectedly closed due to the Great Storm of 1987, the DJIA fell 108.35 points (4.6%) to close at 2,246.74 on record volume. Then-Treasury Secretary James Baker stated concerns about the falling prices.

The crash began in Far Eastern markets the morning of October 19, but accelerated in London time—largely because London had closed early on October 16 due to the storm—by 9.30am the London FTSE100 had fallen over 136 points. Later that morning, two U.S. warships shelled an Iranian oil platform in the Persian Gulf in response to Iran’s Silkworm missile attack on the Sea Isle City

Yes today the numbers are higher, but people forget how this works.  The decade from 2000 to 2010 was known as the lost decade where the Dow Jones, S&P, and Nasdaq were all negative point to point.

The world holds more political, and financial risk than ever before.  And in America, nearly everyone’s financial life is attached to the markets directly or indirectly.

What should you do about it?

Ask yourself, how much financial stress you want in your life if this all unravels into financial crisis even bigger that the last one.

That should lead you to what you should do.

CLICK HERE to read the entire Wikipedia summary.