On Thursday of last week, the Dow closed above 16,000 for the first time in its history. I will never forget where I was on that day.

It was a very bittersweet day for the Gunderson family. At 9pm in St. George, Utah I was with my mother, Lucille Bracken Gunderson, who passed from this life and into the next at age 87.

Just one hour before my mother was released, my wife and I became grandparents. At 8pm, Melissa Odette Furrows entered this world in Rexburg, Idaho. My wife got there just in the nick of time while I remained behind to be with my mother.

It is funny how things work out some times. One coming and one going.

So Mellisa Odette Furrows was born on November 21, 2013 with the Dow at 16,000. When my mother was born in Tooele, Utah 87 years earlier, the Dow was at 160.

What if sweet Melissa grows to the same ripe old age of 87 that my mom did? Where could the Dow be? Well, that is some pretty simple math.

160 is to 16,000 as 16,000 is to 1,600,000!

That works out to about 5.5% per year. If the Dow were to average 5.5% per year over the next 87 years, the Dow would hit 1,000,000 seventy-nine years from now. I wonder if they would split it along the way?

If I put \$1,000 in an index fund for my new granddaughter this week it would be worth over \$97,000 by the time she is 87. (At 5.5% per year.)

If I put that money in a savings account at the bank that averaged 1% per year it would only grow to \$2,377! What good would that be 87 years from now?

You can see the need for being willing to take a little risk with our capital that is set aside for growth.

Just for fun, what if Grandpa Bill is a superior stock-picker and can avoid some of the big downturns in the market with a little market timing over the years? I am not making any promises here, but just doing an illustration.

At 8% per year, \$1,000 turns into \$808,848 over the next 87 years. It sure beats that CD scenario.

At 10% per year, \$1,000 turns into \$3,991,753. I think I choose door number three!

You can see how just a few percentage points over time can make such a huge difference!

I just don’t think that allocating our assets far and wide is the ticket to superior performance over the years. You would probably be looking at more of that 5% outcome, in my opinion.

I make no guarantees or claims, but I believe that by being in the right asset classes and individual investments at the right time, at least increases your probability to better than mediocre returns over the long haul.

So let’s see where the market is at currently. We have to worry about today. Where would I invest Melissa’s money today?

Let’s begin with our market timing. Is this a time to be in or out of stocks?

One-year chart of the S&P 500

I think I will pass on the one-year CD’s right now. The STOCK MARKET continues to hit new highs.

Those 1% annual CD’s may come in handy in a bear market, but this bull is now 4.8 years old and the FES is still behind us.

The market has hardly paused since November of last year, and for now it is still going strong. 1800 is a new all-time high for the Standard and Poor’s index.

One-year chart of the NASDAQ:

The NASDAQ is ever so close to 4,000. It makes little sense to sell here.

One-year chart of the DJIA

This is a fresh, new breakout for the Dow that has carried it above 16,000 for the first time. I predicted that it would breakout out again just two weeks ago. Where will the Dow be 87 years from now? Over one million? I guess I will never know. It looks like all systems are still go on the stock market for now, however.

Let’s check the current ranking of the asset classes. I rank 45 different asset classes (including a lot of stock and bond oriented ones) on a daily basis. I generally focus on the top 8-10. Here is how they currently stack up:

Top 8 (3 wks. ago)

Top 8 (2 wks. ago)

Top 8 (This week)

Courtesy of Best Stocks Now! app Courtesy of Best Stocks Now! app Courtesy of Best Stocks Now! app

These small and mid-cap, domestic stock trends have been in place all year long. Nothing has changed this week. THE TOP TEN OUT OF 45 ASSET CLASSES ARE STILL STOCK ORIENTED!

Stocks continue to rule the roost. Now let’s look at the worst-ranked asset classes.

Bottom 8 two weeks ago

Bottom 8 last week

Bottom 8 this week

Courtesy of Best Stocks Now! app Courtesy of Best Stocks Now! app Courtesy of Best Stocks Now! app

BEING SHORT THE MARKET is still the worst place to be. Gold is down 25% year to date; interest rate sensitive investments and bonds continue to be very poor places to be invested. In fact the bond market is in a BEAR MARKET. Why would I put money in bonds right now?

So where would I put the money today? This bull market is now almost five years old. It will end at some point in time, but stocks are still the best play—preferably American small, and mid-caps!

Dow one million here we come. Who wants to be a millionaire?

#### Bill Gunderson Follow @twitterapi

Bill Gunderson is the CEO and Chief Market Strategist of Gunderson Capital Managment in San Diego, CA. He is also a professional money manager, former research analyst, author of Best Stocks Now. http://www.pwstreet.com