30,000 Dow

Dear Mr. Berko: Several times in the past couple of months, you’ve said the Dow Jones industrial average will reach 30,000 in the coming 10 years. You must be smoking a controlled substance, because that would be a 10,000-point increase. The Dow closed above 10,000 in February 1999, and in the 18 years since, the Dow has moved to only about 20,000 points. What makes you think it could do 10,000 points in the next 10 years? Donald Trump is a clown, and I think your optimism is stupid. My stockbroker recommends 50 percent cash. But just in case 30,000 is possible, what stocks would get me a 50 percent return in 10 years? — PS, Jonesboro, Ark.
Dear PS: Always be an optimist; they get invited to more parties than pessimists.
Warren Harding, in the third year of his presidential term, died from a heart problem, making his vice president, Calvin Coolidge, the 30th president of the United States. In 1924, with his popularity zooming in the soaring economy of the Roaring ’20s, he easily won the election. Silent Cal, as he was called, is known for this famous quotation: “The chief business of the American people is business.” We need a businessman in the Oval Office, not a politician. My definition of politics comes from two words: “poly-,” a combining form meaning “many,” and “ticks,” a noun denoting bloodsucking parasites.
Wise economists and knowledgeable observers feel there’s a good possibility the Dow will reach 30,000 in the coming decade. They believe that Trump, whose reputation as a sharp-elbowed businessman, will use his business acumen in the Oval Office. Informed insiders know that Trump’s business experience — and the businesspeople he has appointed to Cabinet positions — could help eliminate the choking red-tape bureaucracy that strangles business growth and make it easier for industry to expand. Give him a chance.
Dan Saul Knight, a math genius from IT&T College who also teaches dancing at Arthur Murray, believes a 30,000 Dow will soon be fait accompli. Dan says that if the 30 stocks in the SPDR Dow Jones Industrial Average ETF (DIA-$197) increased by an average of just 6 percent annually for seven years, the Dow would top the charts at 30,000. So a 30,000 Dow may be easier than many pessimists can imagine.
The average dividend yield on the 30 stocks that make up the Dow Jones industrial average in 2016 was 2.5 percent, so if you invested $10,000 in the DIA last year, you’d have received $250 in dividend income. Now, if the stocks in the DIA were to increase in value by a measly 3.5 percent annually, your total return would be (2.5 plus 3.5) 6 percent. And according to Dan, a 6 percent return, with all dividends reinvested, would grow your $10,000 DIA investment to $15,000 in seven years and the Dow Jones industrial average from 20,000 to 30,000. It’s really rather simple. Dan says, “Between 1900 and 2016, the average annualized return, just on the DIA, was 4.8 percent, not including dividends.” And “the actual average annual total return for the DIA (with all dividends reinvested) for the last 116 years was 9.6 percent. Therefore, a 6 percent average annual total return when the historical average is 9.6 percent is an easy-pie shoo-in.”
You could hedge your bet by buying 100 shares of DIA and telling your broker to mark the purchase “reinvest dividends.” DIA pays a quarterly 56-cent dividend that usually increases each year. So the day the DIA dividend is paid, your broker could purchase a fractional share of DIA, which in this instance would be 0.28 share. Therefore, at the end of the first quarter, you’d own 100.028 shares paying a dividend. And at the end of the year (three more quarters of reinvesting dividends), you’d own 101.18 shares that pay a dividend. Every quarter, your number of shares would increase, and so would the dividend income from the additional shares. There’d be no cost, and it would be automatic. And each quarter, your account would report the number of increasing shares purchased by your increasing dividends.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.