On Wednesday, the Dow Jones industrial average broke through the 22,000-point mark for the first time in its history
Andrew Karolyi, professor of asset management and finance at Cornell SC Johnson College of Business, recently authored a paper about the shrinking number of exchange-listed firms in the U.S. He says that today’s milestone should prompt investors to sit down for a financial checkup.
“Another milestone for the Dow means another chance to ask the hard questions about fundamentals that might justify it.
“Healthy job growth, reasonably-paced and balanced economic expansion, modest inflation expectations, solid second-quarter corporate earnings, and remarkably low expected market volatility surely are the tailwinds pushing the Dow higher.
“But there are serious headwinds, including fiscal policy uncertainty (tax reform, infrastructure), political stasis, turbulence in international trade and investment relationships, and many geo-political risks.
“A 22,000 point Dow may be just the prompt investors need to book a sit-down with their financial advisors for that regular financial health checkup.”