When James Glassman and Kevin Hassett published their book “Dow 36,000” in 1999, they predicted the title number would be reached in 3 to 5 years—not the 22 years it actually took. But both authors stand by the book, saying the underlying message that a buy-and-hold diversified approach is the best bet for investors in the long run has stood the test of time. With the Dow hitting the 36,000 target at long last, Bloomberg caught up with Glassman for an interview.
Though Glassman doesn’t regret the title of the book—which his publisher chose—he does regret intimating that the Dow was going to hit the 36,000 mark within a few years. And he believes it was a mistake to define risk only by volatility of stock prices when there are many more factors that go into, as he’s learned since.
Glassman also finds it frustrating that the flashpoint title overshadowed the deeper message of the book: that the benefits of buying and holding a diversified portfolio far outweigh the disadvantages—an approach he stands by today. Americans continue to jump in and out of stocks, he lamented, noting that a lower proportion of U.S. households owns stocks (56%) than when they wrote the book in 1999 (60%). Glassman urges investors to buy index funds alongside a few stocks, and see which one does better. He listed 5 solid pieces of advice for investors:
- Buy index funds
- Make automatic purchases with the same amount every month
- Don’t pay attention to the market or your balance
- Hold onto them until you absolutely have to sell
- Look out for tax consequences
These days, after serving in the Bush Administration, Glassman runs a small public affairs firm and is the chairman of the International Commission to Re-Ignite the Fight Against Smoking. He’s also working on a new book—title undecided, as of yet.