Dow 1 Million, Here We Come

by Jason Unger

We tend not to focus too much on the predicting the stock market, except for knowing that in the long-term, it goes up.

Your investing should be long-term with index funds leading the way, and as we’ve seen recently, there’s no better option for investors.

So while the Dow Jones Industrial Average currently sits at all-time highs in the 22,000s, our good friend and trusted advisor Warren Buffett is confident we should only expect it to rise.

Speaking at a celebration marking the 100th anniversary of Forbes, Buffett said that in 100 years from now — September 2117 — the market should be over 1 million. “The Dow will be over a million and that is not a ridiculous forecast at all if you do the math,” he says.

Obviously, forecasting Dow 1 million makes for a good headline, but as the Wall Street Journal points out, it’s not really a risky prediction.

It would take a 3.9% annual gain for the Dow to hit that benchmark in September of 2117. For context, the Dow has climbed 5.8% annually over the 100 years through Tuesday.

The bigger point Buffett is making is that, even when we in the short-term are worried about a changing political landscape, internalization and protectionist economic policies, and technology’s role in the future of work, in the long-term, things have always — and will continue — to grow.

“Being short America has been a loser’s game,” said Buffett. “And it will continue to be a loser’s game.”

For comparison, about 100 years ago, the Dow was at 81 … and it’s grown quite a bit since then.

Here’s a video of Buffett’s prediction.

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