Tell me why it matters …
The short answer is that it doesn’t. Unless of course you’re the Bud Fox type looking for a reason to be bullish on French martinis at Dorsia while avoiding texts from your wife.
Like the date changing for the New Year or you finally hitting double digits in the sexual partner category, the Dow is simply an arbitrary number that matters to a few old white people at the Wall Street Journal (and your Econ 101 teacher.)
So WTF is the Dow Jones Industrial Average?
It was an Average of stock prices created by the editor of the Wall Street Journal in the late 1800’s to help readers understand the stock market before Investopedia was born to help people like you cheat your way through b-school.
The actual number itself is a price-weighted average of the 30 (duh) stock components that comprise the index. And just when you thought you could do simple math to figure the DJIA out, think again! The brain trust deep in the bowels of a mahogany library, lined with leather-bound books and full of Ben Stein impersonators, had to go and make it complicated: the divisor changes based on stock splits, dividend etc. I don’t get paid enough for this shit.
But wait, there’s more! The Dow Jones Industrial Average must include Industrial stocks … right? After the advent of the EPA and the discovery of black lung, industrial firms in the purest sense became a lot less profitable (or something like that), and since the Average was meant to include, the vaguely outlined, “30 large publicly owned companies,” other firms filled its shoes. Household names like GE, Coca-Cola and IBM have been the juggernauts of this heavyweight division for the past 100+ years.
And your point is?
For all of it’s insignificance, from an economic standpoint, the only real significance is that this threshold is overdue. And of course, your 401k and Bar Mitzvah stocks might have gone up today. Sorry for raining on your parade.
So, does 20k really matter? No it doesn’t. But the long-term implications of the stock market increasing do, obviously. The market remains strong on the news that President Trump plans to increase infrastructure spending. So if nothing else, the Dow hitting 20k is subtle reminder that your commute to work or your sewers or whatever the fuck the wildly broad term infrastructure means might get better for you going forward.
The Wall Street Journal does a MUCH better job of explaining all of this on the most insignificant, significant day in stock market history.