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20,000

|Includes: SPDR Dow Jones Industrial Average ETF (DIA)

As of this writing, the Dow (NYSEARCA:DIA) is just beneath 20,000. A new round number gives CNBC commentators something to discuss in front of their remaining viewers, even if it is a grimy, random collection of stocks. What are you getting for the equity market at this price? You get a market cap that is over 126% of the GDP. Historically, markets have a negative return from such levels (in the few instances when it has gotten this high). At over 28, the cyclically adjusted PE ratio is 69% above the mean of around 17. Historically, this measurement also implies negative prospective returns. The situation may also be exacerbated by the bursting bond bubble. This dramatic market does not necessarily call for any dramatic response, but instead calls for caution and an adequate margin of safety. As long as you are underpaying enough, you will probably be fine. This month, I am compiling a list of opportunities to underpay (Top Picks For 2017). This effort will culminate in my best overall idea for 2017 sometime towards the end of this month. It will be available first on Sifting the World.