bubble in 1999. He said: “They are trading somewhere in the middle of their range, so are neither exceptionally cheap or hideously expensive. When the earnings generated by companies in the US and UK markets are factored in, valuations don’t show the irrational exuberance of 1999.” America is the best researched market in the world, which means active fund managers have a poor record of delivering higher returns than the index. In a recent analysis conducted by Telegraph Money, only 23pc of fund managers investing in US companies beat the market over a five-year period. Cheaper “passive” funds, which just track the market, may be a better way to get exposure to the market at a lower cost.
Vanguard’s S&P 500 exchangetraded fund tracks the S&P 500, the main American index, for an annual charge of 0.05pc.
L&G’s US Index Trust tracks the performance of the FTSE USA index, which is similar to the S&P 500, for an annual charge of 0.1pc.
The two indices above are more representative of the US market as a whole than the Dow Jones.
For those who do want to buy it, BlackRock’s iShares Dow Jones exchange-traded fund tracks the index for a charge of 0.2pc.
The Dow Jones index hit the 20,000 level for the first time ever this week, buoyed by expectations that Donald Trump will lower corporate taxes and lift spending