In a bid to fill the empty air time that is the trading world in January, news outlets have trumpeted the closure of the Dow Jones at 20,000 points for the second day in a row.
But very few fund managers or investors care much for the milestone, pointing out the Dow Jones is a collection of unsystematic companies, indexed by share price rather than market capitalisation and is far more random than the S&P; 500, which is a 500-stock index based on share market value rather than share price.
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Dow stays above 20,000
US stocks were little changed as investors paused following a two-day rally that pushed the Dow Jones Industrial Average above the 20,000 mark.
Ignore the 20,000 Dow â watch global reflation https://t.co/z1DRCqCzsd via @FT Maybe the last time I have to point out the Dow is stupid?
â John Authers (@johnauthers) January 25, 2017
"Look, it does not matter what Dow Jones does at all," says Randal Jenneke, head of Australian equities at T. Rowe Price. "It's an ancient relic."
The Dow has been a topic of much discussion over the Christmas period. It has approached the milestone 20,000-point threshold around half a dozen times over the past month, but managed to burst through this week.
JUST IN: #Dow closes at record high for the second day in a row. #Dow20K pic.twitter.com/BJZvULNKKH
â Breaking News (@moses11211) January 26, 2017
Established in 1896, before computers existed, the Dow Jones is not designed to calculate total returns, meaning it's impossible to compare the price gains or losses plus reinvested dividends with any of the other indices.
Instead, the Dow Jones industrial average is a 30-stock average based on stock prices and includes heavyweights such as Goldman Sachs, Microsoft, Walt Disney and McDonald's.
Goldman Sachs has largely been the driving force behind the Dow's crusade to 20,000 points, contributing 36.6 per cent to the Dow's post-election rally of 1,600 points, according to Bloomberg data.
And while there are other American stocks that have performed much better than Goldman Sachs, because the stock itself is the most expensive in the Dow Jones pool it has the most influence on the price-weighted index. At around $US240 a share, Goldman Sachs is worth nearly eight times more than "cheap" Dow stocks like General Electric.
"The index itself is a product of history and its construction is highly unusual." says Tom King, portfolio manager at Nanuk Asset Manager. "As such the technical 20,000 level is kind of meaningless."
But the risk-on sentiment that has swept through financial markets and sent them soaring higher is likely to continue giving Australian stocks a boost, say fund managers, pointing to Australia's proliferation of resource, financial and global cyclical stocks as beneficiaries.
"Australia is well exposed," says Mr Jenneke. "Certainly over the last quarter we have been moving towards a pro-growth type environment, which was really building before Trump won the US election.
"A more pro-fiscal policy stance by this new president will pour more fuel on that fire."