Making a big deal out of a round number, Dow at 30,000 edition

The Dow recently topped 30,000. What is notable about this number?

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How big a deal is Dow 30,000?

It’s just an arbitrary number, and it doesn’t mean things are much better than when the Dow was at 29,999. What’s more impactful is that the Dow has finally clawed back all its losses from the pandemic and is once again reaching new heights. It is up 61.5% since dropping below 18,600 on March 23.

It took just over nine months for the Dow to surpass the record it had set in February, before panic about the coronavirus triggered the market’s breathtaking sell-off.

I like this explanation for two reasons. First, it downplays hitting 30,000 just because it is a large round number. Why should 30,000 be more important than 29,000 or 29,852? Because round numbers seem more meaningful to us, especially one that is a change from the 20,000s to the 30,000s. Second, it provides a longer context for the rise to 30,000. That particular number is meaningful in part because of the record in February, the drop in March, and then the steady rise. Arguably, this rise since March is much more important than getting past a particular number.

In addition to these steps, a few more could help people interpret the 30,000 figure. Instead of focusing on a particular number, how about discussing the percentage change? This is done regularly with other financial figures. Such a story is ripe for a visual showing the change over time. And a final option would be to downplay such milestone numbers in this story and in future reporting and instead focus on other markers of financial patterns rather than emphasizing outliers (peaks and valleys).

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