The November net worth index update now contains the equity value of my new investment property. I have been looking forward to closing this deal for the past few months and have been working on buying a new investment property for a year or so. Also this month, there has also been a significant increase in the Dow Jones Industrial Average (DJIA) which resulted in a positive move in my net worth. With my extreme investing approach, I expect that changes in the DJIA will cause significant changes to my net worth, for good or ill.
Let’s take a quick look at some of the big changes. I’m excited about the positive movement and hope you are also seeing the benefit to your stock portfolio as well.
I believe the Dow Jones Industrial Average is headed to 150,000 very soon.
Does anyone remember the book Dow 100,000 Fact or Fiction? This book was cool based on the title alone. Or how about the somewhat less exciting and provocative Dow 40,000? Both of these books came out in 1999. The 90’s were such a great time for stocks.
It’s that time again, time for another Net Worth index update. This should get more and more interesting as time goes on and there is more data to chart. Over the coming months I am sure a story will develop. Because I am a proponent of extreme investing, I believe that these updates will be very interesting at some point. That is just a function of the leverage that I’m using. Hopefully, the leverage will work for me in a positive way and not a negative one!
This month there is a lot going on even though the index value is fairly stable.
I was recently talking to my older brother about investing in our 401(k) and was hoping to encourage him to invest more in it. I am a finance blogger and employed in the field of finance so I figured I could offer some thoughts from the things I’d been writing about recently and convince him to increase his savings.
I didn’t realize that he would actually be the one encouraging me!
If someone were to ask you in 2046 how you should have invested your money in 2016 what would you say? I think this is a really helpful question.
I’ve been thinking about this a lot lately and it has really been a helpful thought experiment. Asking yourself this questions leads to other questions which help focus your goals.
For instance, how old will you be in 2046 and what will your lifestyle goals be at that time? What kinds of things will be truly important to you then? Being able to help your children and grandchildren? Being financially independent? Giving to a non-profit that is special to you? Creating an endowment or a scholarship in honor of someone you respect? Or how about creating a trust for your grandchildren to fund their education or for them to purchase a house?
Is the Dow Jones Industrial Average ready for a large move upward? I believe it is. Look at the below graph:
The upward sloped line is an exponential trendline based on 11% average return which is not too outlandish for the Dow Jones. However, the sad blue flat line on the bottom represents the actual return.
Yes this is simplistic – but I believe a reversion to the mean is coming soon with a large and sustained move upward. We’ll have to make up some ground to get back to where we “should” be on the Dow.