Dow Jones Industrial Average Falls to 1997 Levels

The Dow Jones fell to 7,115 today (a level not seen since 1997). I graduated from college in 1996. It would have been crazy to think at the time, with the dot-com and housing bubbles ahead of me, that I would have been better off investing in bonds or U.S. treasuries for the next ten-plus years, rather than the stock market.

Now, with all of those historic events (and the birth of my two daughters) behind me , my sentiment is neither overly pessimistic or optimistic. It will take us a while to work through all the issues of the past couple years, but I don't think the U.S. is going to become a socialist state overnight (people were saying the same thing during FDR's tenure, and the pendulum swung back to the right, eventually). I think the typical American on the street has a decent head on their shoulders (economically speaking) and thinks of the current stimulus packages as a short-term bitter pill (like using your credit card to get by for a month when you lose your job).

If I were recommending a course of action, I'd say to start funding your 401k again, if you stopped, or stick your money in an index fund. The goal is to buy low and sell high, right? We know that the Dow is lower now than any time in the past ten years. Ten years down the road, when Time has a huge dollar sign on the cover, like it did on June 13th, 2005, sell.