Although it lost 0.47% (61 points) this past week, the Dow Jones Industrial Average
In fact, since the widely followed index of U.S. blue chips bottomed out in March 2009, it's nearly doubled.
Interestingly, because corporate earnings have been so strong in the past few years, that run-up hasn't translated into sky-high price multiples. As the following table shows, the Dow index trades at a reasonable price-to-earnings multiple. Returns on equity have been moving up, while debt loads have been coming down:
|Price change of Dow-tracking SPDR Dow Jones Industrial Average ETF
Data from S&P Capital IQ; calendar years used. Price data from Morningstar.
That's largely good news for followers of the market's most popular index. Although I prefer other indexes (because of the Dow's price-weighting), and although uncertainty in Europe persists -- as we saw yesterday, when the index had its worst one-day performance of 2012 -- the Dow seems reasonably valued right now. That's a good sign for long-term-focused investors.
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