I’ve been an investor for a long time and I’m interested in trends in the market, because we all know investing in the stock market (or real estate market) is not a short term endeavor if you want to truly be successful.  I love the charts on Yahoo and with the DJIA rising in recent weeks I wondered what the long term chart looked like for the DJIA in January of each year over the past 20 years.  I kept buying shares during the 2000-2002 downturn and made a very nice double digit return in 2003.  Is the current chart so very different?  Looking at the chart for the past 6 months is scary but here’s what I found out when I took a longer view.

At the beginning of 2003 after the previous downturn, the DJIA was at 8054.  In January 2009, the DJIA was at 8001.  Let’s look at the long term trend from 01/1989 to 01/2009:   01/89 2342, 01/90 2590, 01/91 2736, 01/92 3226, 01/93 3310, 01/94 3978, 01/95 3844, 01/96 5395, 01/97 6813, 01/98 7908, 01/99 9358, 01/00 10940, 01/01 10887, 01/02 9920, 01/03 8054, 01/04 10488, 01/05 10490, 01/06 10865, 01/07 12622, 01/08 12650, 01/09 8001.  Would you have invested over the past 20 years knowing what has happened in the past 6 months?  I sure would have.  I would have put in even more than I did!  The point a lot of people miss is that the real value of long term investing is not how rapidly the indexes rise, but how many shares you are accumulating along the way.  If you sell out near the bottom or you don’t continue to invest when the market is down you lose a lot of ground.  Buy low, sell high means buy lots more shares at low prices and reap the rewards when prices go up and you get to cash in to have money to live or achieve goals you’ve set.

Just thought you’d like to know.   If you had continued to invest and have more now than 20 years ago, do you think you’d have money to invest in historically low priced real estate too?  Something to think about.  Fear and greed drive short term movements in the markets.  A long term vision helps put it all in perspective.  If you want to know how to do it, there are a lot of good books on library shelves that can help you.  If you need help picking and sticking with an investment allocation, meet with a good experienced financial advisor to get you going.