Dow hits record high! Yawn.

Dow 13000 is certainly a milestone. But, really, it’s no more noteworthy than your last birthday (nothing personal), which by definition is your personal best in the age department, but does not warrant notation in the annals of mankind.

In fact, just like your age, reaching higher and higher levels is the natural progression of stock markets. It is what should be expected to happen, especially when the index represents some of the currently strongest companies operating in a steadily growing economy that is supported by (or supporting) an ever-growing and geographically expanding population base.

What’s remarkable to me is not that the stock market’s long-term growth has been so persistent, but that its short-term growth is always so erratic.

This was nicely illustrated not two weeks ago as the market reached for another “record.” It clocked eight straight days of up markets. The all time record is only 14 days (May 28 through June 14, 1897). There have been only eight instances of eleven or more consecutive up days. And, the percent of months that saw positive index price moves is a mere 59% – indexes have declined in four of every ten months on average, or about five months every year. The percent of days that saw positive price moves is (prepare to gasp) only 50% rounded to the nearest whole number! Almost exactly half of stock market trading days have been losers. No wonder the market so rarely puts two weeks or more of up days in a row.

This kind of short-term randomness is not what any normal person would expect of a market that averages advances of about 10% annually and has never had a negative return for any 20-year period. But, this is exactly why investors in retirement need to be careful not to depend on their stocks rising steadily along with their living costs. Historically, stocks have matched or exceeded the rise in living costs on average over time, but if you want steady, you’re not going to get that from stocks.

You might relate this short-term variability to how old you feel, which can vary markedly day-to-day or even hour-to-hour. The long-term growth persistence relates to how old you really are, which steadily grinds higher no matter how you feel. Until some unknown point in the future, of course. And, then it doesn’t matter any more. Yawn.