As the data is tracking today, the Dow Jones Industrial Average (DJIA) is on its way to having its best June in decades.
Gains in recent days have sent the Dow Jones towards record territory. This reflects the overall strength of the stock market, despite headwinds that have come in the form of trade tensions and shifting Federal Reserve sentiment.
Great News for a Major Industry Benchmark
The Dow Jones Industrial Average is one of the key benchmarks used by analysts and economists when evaluating the health of the stock market.
The Dow Jones tracks 30 stocks, all of which are also present in the S&P 500 index. Stocks included are the largest and most valuable in the world. They include Boeing, Caterpillar, Apple, American Express, Microsoft, JP Morgan Chase, Intel, and others.
The Dow Jones is close to achieving a 7.7% return this June, which will make it the best gain since 1938.
It’s not the only index to be performing well. The S&P 500 (SPX), which tracks a larger group of stocks, is close to achieving a gain of 7.2%, which would be the best since 1955.
Some Analysts Predict Even More Growth for the Dow Jones
In the long term, some analysts believe that the Dow Jones could achieve 30,000 points, a gain of over 3,000 points when compared to today.
Despite the strong performance of the index and the market overall, this would be a difficult milestone to reach. The growth rate of the U.S. economy is currently slowing and some even believe that there is a recession on the horizon. While there could be ways to stimulate the economy, 30,000 points for the Dow is an optimistic figure.
Investors should understand that while performance is strong, and indexes are close to hitting historic records, any predictions of long-term growth should be taken with more than a grain of salt.
Diversification, smart investments based on industry and company potential, and buying dividend stocks for protection, are all sound strategies that investors can follow.
Strong stock market performance is undoubtably good news, but caution is important when trying to predict the future. Volatility is always a possibility, especially when trade tensions and even domestic economic factors can shift the market without warning.
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