Whew! You just had to ask such a simple question didn't you! Just kidding, I'll give this one my best shot, but this one's definitely an educated guess!

     That number you're talking about is called the Dow Jones Industrial Average, and it's a meter of how the market as a whole is doing. The Dow (as it's called) is a group of 30 big-name companies like Home Depot, Microsoft and General Electric just to name a few. The Dow adds all of these companies' stock prices up each day (it's a teensy bit more complicated than that but I'm not goin' there) and divides by 30 to get the average. This kind of gives a look at how companies as a whole are doing in the economy. So, something has definitely happened lately, because the Dow really used to be as high as you say it was.

Dot-Bomb

     We've been in a recession for about a year, so that explains things somewhat. But there's more to it than that I think. You've probably heard of what's called the dot-com bubble that burst, which is a cutesy way of talking about all of the funky Internet Companies that used to be in business not too long ago that went out of business. Remember the Pets.com sock puppet? Gone. Well, a lot of those companies raised a ton of money and started offering their stock on the stock market. A lot of people bought their stock. Problem was, most of these companies didn't sell or produce a thing, which is kind of important if you're a business. So, hundreds of dot-coms became dot-bombs and millions of people who had invested in them lost a lot of money! The high Dow number you mentioned was at the very top of when those companies were still in business, then we started the looooong slide, baby! We're still recovering from that.

When Good Companies Go Bad

     There's another thing that's hurting the market a lot, I'm sure you've heard a little bit about it on the news as well. There have been a few companies that have been in trouble lately because of lies and trickery that their presidents have been making the rest of us investors eat. Companies are required by law to be completely 100% honest about how they are doing, whether they're making gobs of money and yay, or losing their shirts and run for the hills! The presidents of these companies in the news haven't been honest. In fact, they've ripped MILLIONS of people off by lying about their companies' finances and getting rich while others invest in them and keep investing until the floor gets yanked out and it's too late. People have lost money, and I mean BIG money. I've heard stories about retired people who now have to go back to work and work the rest of their lives! Your parents have most likely lost money because of these criminals. If you couldn't tell, I get pretty worked up over this. This is way worse than robbing a bank or something. It's like they snuck into three million homes and stole $10,000 out of each house.

     All of these reasons, along with what happened on September 11th and the War on Terror our nation is involved in, has pretty much guaranteed a pounding in the stock market. Luckily, with time, all of these reasons can be reversed. Brighter days are ahead!

Did You Know?

The Dow was first published in 1896. For dozens of years (until 1948), a guy with just a pencil and paper by the name of Pops computed the average at the end of every trading day while all of the traders waited on the trading floor down below.