The Dow is a hair away from 11,000 points as of the closing bell, but moments before trading stopped the index reclaimed the mark briefly for the first time since September of 2008. Investors everywhere are obviously glad to see the landmark index is still tacking on gains — but they are conflicted about what the 11k mark means. Some are optimistic that Dow 11,000 is just another mark on the slow but steady road to recovery, and others are convinced that the benchmark will just be fleeting level achieved before the inevitable sell signal on an overbought market.
Five of InvestorPlace.com’s top stock market advisers have weighed in on what Dow 11,000 means to investors like you. Here’s what they say:
Expect a Correction – and Buy It!
Expert: John Lansing
Strategy: Fast-paced day trading seeking instant profits
His take: Once the Dow hits 11,000, chances are high that we will see a massive correction to the tune of 500 points. But if you think that means it’s time to take your money and run from the market screaming, you’re dead wrong! This correction will be a natural response to this year’s run-up, and it will be a prelude to the mother of all summer rallies. Wait for the correction, and buy it!
Get more investing advice from John about options and day trading in his free report, The 10-to-1 Trading Secret.
It’s Time to Short This Rally
Expert: Michael Shulman
Strategy: Exploiting the market’s weakness through short selling
His take: The Dow will sail through 11,000 and could even climb past 12,000 before economic reality overwhelms headlines, traders and those born bullish. That means we’re in for a tumble, and it’s time to play the downside. I recommend buying puts on inverse ETFs. An inverse ETF is an exchange traded fund that goes up when the market goes down. Better still, there are double and triple inverse ETFs that move 1.5 to three times the index they are mirroring.
Read more about Michael Shulman and options trading on the FREE website OptionsZone.com.
Earnings Are the Real Story
Expert: Louis Navellier
Strategy: Growth stock investing focused on fundamentals
His take: Dow 11,000 is not a big deal for stocks or the market, except that it means that the mainstream media will proclaim that the Dow has risen dramatically from its lows. Dow 13,000 is much more significant, since it will represent almost a double from the lows. Upcoming first-quarter earnings are what investors should really care about right now.
Find out Louis Navellier’s favorite growth stocks for the recovery in his free stock report, Five Small-Cap Stocks to Buy Now.
Buy the Rally on 5% to 10% Dips
Expert: Richard Band
Strategy: Low-risk, long-term investing with dividend opportunities
His take: Dow 11,000 is certainly worth cheering, because it represents a major milestone on the global economy’s road to recovery from the Great Recession. What really counts, though, is where we go from here. Remember, the Dow first achieved these levels way back in April 1999. No investor wants their retirement funds to trade flat for over a decade! While the trend is up for the market and I’m bullish on the rest of 2010, we’re overdue for a pullback. I recommend doing your buying on dips of 5%-10% in the blue chip stock indexes.
Find out more about Richard Band’s favorite low-risk dividend stocks in his latest article 5 Dividend Stocks to Plant This Spring.
Forget the Dow: Watch Asia
Expert: Robert Hsu
Strategy: Investing in the best Asia and emerging market stocks
His take: While it’s nice to see U.S. equities bouncing back, smart investors around the globe know that when it comes to getting real returns on your investment capital, the action isn’t in the Dow. That’s because the real engine of the world’s economy is in the emerging economies of Asia, chiefly China. As the U.S. economy continues making a sluggish recovery, China’s GDP is on pace to grow as much as 12% according to some estimates. That kind of growth is where the real money is.
For more China investment opportunities, check out Robert Hsu’s free report, Your Guide to Profiting From Asia’s Explosive Growth.
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