The Dow Jones Industrial Average got pretty close yesterday to breaking the 10,000 point mark for the first time since the ‘08 crash. It’s no surprise that there has been much attention paid to this. It is, after all, a significant number, even if it’s mostly psychological.

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Ask yourself, “Does the fact that the DOW crosses a given threshold really mean that much?” Isn’t it the overall trend (direction and momentum) more important? Well, yes and no.

The DOW crossing the 10,000 point mark doesn’t mean that the market is in a definitive bull phase, or that the recession has officially ended. It’s not significant in that sense, but it is in a psychological sense. The market, which is nothing more than the aggregate opinion of all investors, has made 10,000 the hurdle of the moment and because if that very reason – and no other – it is significant.

It may not be today, and it may not be tomorrow, but rest assured that the DOW will cross that 10,000 boundary eventually (and probably soon), and when it does, you’ll need to decide how it effects you.

Because so much emphasis is being placed on this figure, many investors will be using it as a bell weather. My gut is telling me that when the DOW does break 10,000, it won’t stay there for long. I think many investors will use that mark as a time to take some profits off the table which in turn will drive the price of stocks back down a bit.

What does this mean? Well, it means that if you’re one of these traders you’d better get your timing right. But it also means that if you’re looking to buy back into the market soon, you might consider only doing so with part of your money, and keep some set aside for any potential dip in the value.

By doing so, you are ensuring that you will have some money invested whether the DOW blasts past 10,000 and keeps running, or if it drops back to 9,700 or so you can pick up some more potential bargains on the weakness.

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