Market milestones mean nothing

It’s been a good month for big round numbers in the markets. Last week, America’s Dow Jones index rose above the 17,000 mark to a new record. The S&P 500 is around 2,000 and Britain’s FTSE 100 is expected to hit 7,000 soon. But while these round numbers generate headlines, clearly there is nothing intrinsically significant about them.

We only consider them to be milestones at all because of “our brains’ attempts to impose order and assign categories to numbers that vary continuously”, says US journalist Carl Bialik.

It’s particularly easy for us to [...]

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