Dow 2.8 million? It’s not even a stretch — for your grandchildren.

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Nvidia-fueled gains are ahead for Thursday, as the AI chip king logged some spectacular results.

The big tech faithful seem rewarded for now, even though some have been nervous after last year’s big gains. Count the chairman and partner at?Bel Air Investment Advisors, Todd Morgan, in the unworried camp.

His simple advice for retail investors in our call of the day? Think long-term and stay the course.

Morgan, whose wealth-management firm looks after $10 billion, shares a long-game lesson from his industry start in the 1970s, when the Dow Jones Industrial Average DJIA traded at 500 to 1,000. “When it broke 1,000, everybody said ‘You gotta get out of the market. It’s too high,’” he says of the index that’s now 40 times higher, in a MarketWatch interview on Wednesday.

And he’s got some optimistic predictions for the decades to come. Based on compounding interest rates, he said if the Dow rises 7% a year going forward, it will hit 80,000 by 2035. Here’s another: “Before my grandchildren pass away in 64 years, the Dow will be at 2.8 million.”

(Editor’s note: The math checks out, if the Dow compounds at about 7% per year.)

The adviser said while he’s a believer now, in the early days he couldn’t have imagined the index tapping 40,000. “I think you just have to figure out the economy’s going to continue to grow with us,” he says. And while global tensions are a concern, the market has endured plenty of wars, recessions, elections, and other crises, he adds.

The key to Morgan’s 26-year strategy of wealth building and preservation is owning high-quality companies. An overweight in technology has been an integral part of that as he sees tech outperforming the rest of the market in coming years, largely because of artificial intelligence.

He started overweighting tech via the “Magnificent Six” — excluding Tesla — back in 2000, 2005 and 2006. While he admits to some “challenging years,” he says they now have great companies with low cost bases.

Morgan says they also own a lot of the S&P 500 SPX companies, as not just tech gets credit for helping clients retain wealth. He invests in “a lot of great, large-cap multinational companies that have a good return on equity, that have long track records of consistent growth that we are comfortable with, and their household names that most people would be familiar with.”

Morgan declined to discuss specific names, but consumers buy their products daily drinks, clothing, apparel, drugs, etc. And investors might not think much of them as they’re “slow growers…but they’ve been great companies.”

As for finding new stocks, he’s “sprinkled in some AI companies, even though we own the Magnificent Six that are substantial in AI and that’s what’s been driving these companies.”

He’s also “working very hard to find the derivative of some of these big AI names that are beneficiaries…and I’m trying to sprinkle those in right now..companies that these AI producers, these chips or producers are reliant on for energy…”

Away from stocks, Morgan says 15% of client money, on average, goes to alternative investments, including multifamily real estate.

Morgan says for investors who missed Big Tech’s run, remaining diversified and buying quality names is a good strategy. For older investors, say Gen X., he suggests buying 65% or 70% of the S&P 500 and put the rest in tax-free municipal bonds or U.S. government obligations.

And for those 25 or younger? “You should be all in equities.”

“The moral of the story is that you don’t have to be a genius or a rocket scientist. Buy the S&P, buy the Dow, plug your nose, shut your eyes, don’t get frightened, stay the course and you will be shocked at how well your portfolio does,” says the adviser.

Read: Just 9 days account for all the stock market’s 2024 gains. Here’s what they have in common.

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