A Look at the Dow 70 Years From Now
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The article “Using Psychology to Make Economic Predictions” (Oct. 11), which forecast the rise of the Dow Jones average to 100,000 by the year 2060 and labeled it as a skyrocketing return, is a little misleading.
Simple calculation based on the Rule of 72 covering growth rates would show that the 3,150 Dow of today would grow to more than 100,000 in 70 years based on a simple annual growth rate of 5%.
Even with the dividends on the stocks, the implied return is hardly any better than a long-term bond in today’s market.
ALBERT C. FARRELL
Beverly Hills
The writer is senior vice president -- investments at Dean Witter Reynolds Inc.
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