By Kevin Wilson: CNJ Staff Writer
Local agents are suggesting investors stand pat and enjoy the ride after the Dow Jones Industrial average closed Thursday at a record high for a third straight day.
Dean Turvaville of Edward Jones Investments in Clovis said the Dow’s gains are the rewards for investors who put faith in high-quality American companies.
“I think the economy is poised to continue to be very strong,” Turvaville said. “It still is a good time to invest. Who’s to know that today’s record isn’t tomorrow’s history? We feel (the stock market is) an excellent place to invest.”
The blue chip index traded up to 11,870.06, which stands as its trading high.
A recent drop in energy prices is credited with some of the economic boom, but rising oil prices didn’t smother investors’ good mood.
The blue chips have gained 196.34 over the past three sessions; on Tuesday, the index shattered closing and trading highs that had stood since Jan. 24, 2000, which was toward the end of the dot-com boom.
While not all of his clients will have stocks that make up the Dow Jones Industrial Average, Clovis agent Richard Barris said many clients’ stocks are going up as a result.
“We have a rising tide, it raises all boats,” said Barris of H&R Block. “When the Dow goes up, most of the other stocks will go right up as well. However, you don’t realize any gain or loss until they do sell those positions.”
To sell or not to sell is the question for most investors. Barris said for the most part, clients are advised to stay in the market. When people are advised to sell, Barris said, it’s primarily because they have a small horizon, or amount of time to build wealth for retirement purposes.
“If you’re nearing retirement, selling’s a good option to take immediate gains,” Barris said. “If you’re 25, you’d want to hang on because your horizon is so much further. Over time, the stock market has outperformed other investments.”
Just where stocks are in their long recovery from their 2002-03 lows remains a topic of debate on Wall Street.
Some traders have questioned the depth of the rally, saying technical markers such as the ratio of advancers to decliners are weaker than they’ve hoped. And while the Dow has recovered, the S&P 500 still remains more than 11 percent off its all-time high.
Other traders say the market’s biggest fears — high energy prices and additional rate hikes by the Federal Reserve — are behind it, leaving room for a greater run-up in stock prices.
The Dow Jones Industrial Average is one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company founder Charles Dow. The figure is a weighted average of 30 of the largest and most widely held public companies in the United States.
Barris and Turvaville said the main impact eastern New Mexico has on the Dow Jones Index is passive, with some of the companies profiting through local consumers. Notable Dow Jones companies include Wal-Mart, McDonald’s, Coca-Cola and Boeing.
The Associated Press contributed to this report.