loosecannon
Senior Member
- May 7, 2007
- 4,888
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Well none of your comments showed up in your quote so I will have to generalize.
The DOW is a composite measure intended to measure the growth of the entire NYSE body.
It's increased valuations are a function of how many dollars people pump into the stock market and the rise and fall of the dollar much more so than composite growth of the stocks composite values.
Which is why it not only is possible but is the norm for the entire index to be overvalued. Overvalued implies a disconnect between values and prices as in lack of a binding relationship linking the two.
And the laws which created IRA accounts had massive effects on the pricing of composite stock indexes. More money was poured into the market to purchase the same stocks. That is HOW the dot com bubble came to be.
If SS was privatized you can expect the same. The prices of stocks will rise as a function of the total investment capital poured into the market not a reflection of the value of stocks.
If people associate the DOW as an indicator of investor confidence or of the markets actual value then they have probably been misled by pundits and sales/analysts
