The Dow Jones closed yesterday another 50 points higher to settle at near record highs.  While it is nice to see high stock prices, does it mean the economy is improving?

There are many ways to gauge what signals an improving economy.  While stocks are one, unemployment, revenues and other factors also tie in to what means a stronger economy.

"We have an improving economy if you look at housing, manufacturing, employment, they are all moving in the right direction," David Joy, Chief Market Strategist at Ameriprise, said.  "I don't think we are off to the races from here, but i do think the market can work its way higher over time."

Joy mentioned that the American economy is expanding, whereas the European and Japanese economies are contracting, making the American markets more appealing to invest in.  This greater interest in American markets will drive up the value of items like stocks quicker than if other international markets were just as appealing as the American markets.

So what if you have some extra money around you want to invest?

"Dividend paying stocks deliver a nice, steady stream of income and you also get some potential for growth," Joy explained as one possible route.  "Real estate is cheap in certain markets, so don't discount that.  If you are in the market to buy a home, this is a very good time to be buying with interest rates this low or even as an investment possibility."

But which route does Joy think is best?

"I think the best returns are to be expected from the stock market, particularly stocks in the United States."

Do you think the economy is improving?