The Dow Jones Industrial Index surpassed a major milestone this past Tuesday. For the first time, it crossed 30,000. This very popular price-weighted index follows United States blue chips – companies that are leaders in their industries. While no single statistics defines our economic health, the Dow Jones is an important indicator of investors’ confidence.

Symbolically, the Dow measures the health of our economy. Its goal is to give investors and the public an idea of the direction of the stock market at a glance. Since my teenage years, I have avidly followed its price movement, feeling that my personal wealth was intimately associated with its price levels. It is one of the most important poster boys of financial metrics.

The other two important measurement guides are:

• The S&P 500 index, which measures the stock performance of 500 large companies listed on stock exchanges in the United States.

• The NASDAQ composite index, which includes almost all the stocks on the Nasdaq stock market. Most are technology and internet-related, but there are financial, consumer, biotech and industrial companies as well.

Warren Buffett repeatedly encourages us to “Bet on America.” While not as well known, Buffett adds that one needs to be careful about how you bet, because markets can do anything. Over my lifetime, there have been many major price declines. However, the trend has been overwhelmingly positive. Since my birth in 1944, the Dow has climbed more than 200 times. When I began work in 1969, the Dow was below 1,000. While the composition of the companies that represent the Dow have changed, the market value of the Dow has climbed exponentially over an extended period.

The road to 30,000 has always been rocky. While the current news is bleak, I would argue that America has overcome significant challenges during my lifetime. I was born during World War II when we were confronting despotic challenges. Subsequently, we were engaged in the Cold War that tested our free democratic system against the forces of Communism and totalitarianism. Bitter partisan divides have resulted in two impeachment investigations in the last 25 years. Almost every major city in 2020 in the United States has witnessed widespread protests and looting.

Currently, we are confronting a horrendous pandemic, COVID-19, which has killed more than 260,000 Americans. Sadly, we can expect the pandemic death toll to exceed our fatalities during World War II.

On the financial side, we anticipate federal deficits to exceed $1 trillion annually for the foreseeable future. To restore our fiscal solvency, we can expect substantial state and federal tax increases. Despite all of these challenges, the Dow is on pace for the strongest month since 1987.

The Dow tracks the stocks of 30 large companies. It includes major industrial sectors. Utility, real estate and transportation stocks have a separate index. Initially, the Dow heavily focused on manufacturing companies. Currently, stocks that comprise the Dow are not all heavy industrial companies. The fact that we still refer to the term “industrial” is simply homage to its roots.

The current companies that comprise the Dow represent the most highly capitalized and influential companies in the United States economy. The Dow now includes Apple, Boeing, Caterpillar, Walgreens, 3M, Nike, Visa, Pfizer, Procter & Gamble, Walmart, Disney, Coca-Cola, etc.

Will the markets continue to rally? I believe that we will develop vaccines to arrest the pandemic. Social and business activity will return to normalcy. Under the caveat “Do not count your chickens before they hatch,” I can say that overtime earnings for companies that comprise the Dow generally double every 10 years and should quadruple every 20 years. Assuming that the price/earnings ratio remains relatively stable, our children could celebrate the Dow reaching 100,000 in the next generation.

Originally published in the Sarasota Herald-Tribune