Dow 30 Stocks

Updated March 2023

So what is the Dow 30? Well, according to Wikipedia

The Dow Jones Industrial Average (DJIA), or simply the Dow (/ˈdaʊ/), is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States. Although it is one of the most commonly followed equity indices, many consider the Dow to be an inadequate representation of the overall U.S. stock market compared to total market indices such as the Wilshire 5000 or Russell 3000 because it only includes 30 large-cap companies, is not weighted by market capitalization, and does not use a weighted arithmetic mean.

The value of the index is the sum of the price of one share of stock for each component company divided by a factor which changes whenever one of the component stocks has a stock split or stock dividend to generate a consistent value for the index. Since the divisor is currently around 0.1474, the value of the index is 6.7843 times larger than the sum of the component prices. Wikipedia

What’s the significance of the Dow 30 stocks

Market Data by TradingView

According to the Tactical Investor Alternative Dow theory, the Dow utilities lead the way up or down. The utilities are holding up just fine, and based on the ETF IDU; they just put in a new high; Translation, the Dow is likely to take the same path, and the same holds true for the Dow transports.

The Weekly Chart of the Dow

The bulls and the bears are both nervous; very few envision the Dow testing the 29K ranges and possibly overshooting to Dow 30K, which is why this scenario could come to pass.

On the weekly charts (shown below), the Dow is still trading in the extremely overbought ranges. The MACDs have yet to experience a bearish crossover, so the odds are pretty high that the Dow will at least take out its lows again and possibly overshoot the current lows by a few hundred points.

The weekly charts suggest we should be ready for volatile action over the next few weeks.

Dogs Of the Dow Dec 2019 Update

While V readings have not risen, they are trading in the stratosphere and 3700 points above the overbought zone. Unfortunately, wild weather, increased violence, turbo-charged levels of

polarization and foolish behaviour on all fronts serve to validate that high readings are a sign that all is not well. After the holidays, there is a good chance that the Markets will experience a wave of volatility in the 1^st quarter, perhaps as early as January. Do not equate volatile action with a

stock market crash; they are different.

Dow 30K now seems almost guaranteed. When we first issued those targets over two years ago, everyone thought we were insane, and that’s great because when people agree with us, we get nervous.

Tactical Investor Dogs Of the Dow theory

We received many questions on the Tactical Version of the “Dogs of the Dow” Theory. We will cover some of them below and look at some historical and one or two new examples. The first issue was regarding the dividend criteria imposed on the original Dogs of the Dow; as we stated before, we don’t care about the dividend factor. We are looking for the best possible outcome, and to that, we consider two factors if the trend is positive (bullish)

The stock has to be trading in the extremely or insanely oversold ranges on the monthly charts.
The risk-to-reward ratio has to be in our favour.

If the stock pays a high dividend, that’s a bonus, but the dividend factor is not part of the equation.

The shorter the timeline:, the higher the risk factor

Many traders think focusing on shorter timelines is essential; generally, that wastes time and is a perfect recipe for sleepless nights and 5X more stress. We don’t waste time on the daily or hourly charts; the only second timeline we will look at is the weekly chart. In this chart, each bar represents one week’s worth of data.

We look at these timelines because some stocks are highly volatile, and when the weekly chart issues a sell; they can shed up to 30% from their highs before rebounding strongly. Thus we look at these charts to see if we can jump in and out of stock or use a sharp pullback to open additional long positions, provided the risk-to-reward factor is in our favour.

Stock market March 2020 Outlook Update

The 1987 crash and 2008 crash fell into the “mother of all buying opportunities” category, but we could get a setup that could blow these setups and create the “father of all opportunities“. Such an event is so rare that it might occur only once during an individual’s lifetime. In the short term, there is no denying the landscape looks like a massacre, but if one is going to focus solely on the short timelines, then the odds of banking huge profits are pretty slim.

Just 15 days ago, everyone would have begged for such prices, but 15 days later, everyone is ready to throw the towel in. The volatility is likely to continue until the end of the month, especially since V readings soared by a whopping 650 points to an all-time high. Again, think about it, when was the last time the Fed dropped rates by 150 basis points in two weeks? This is a massive development, but the current hysteria overshadows it. As stated before, companies will go ballistic with their share buyback programs.

When the panic subsides, it will create a feeding frenzy of the likes we have never seen before. When you combine zero rates, two trillion dollar injections by the Feds and several more billion-dollar packages designed to stimulate the economy, the result will be a market melting upwards. The markets will be driven to unimaginable heights by today’s standards. Zero rates will also force many individuals on a fixed income to speculate, and these guys have a lot of cash sitting on the sidelines.

Insiders are devouring stock.

Insiders have been using this massive pullback to purchase shares, and one way to measure the intensity of their buying is to check the sell-to-buy ratio. Any reading of 2.00 is considered normal, and below 0.90 is considered exceptionally bullish. So what do you think the current ratio is; well, it’s at a mind-numbing 0.35, which means these guys are backing up the truck and purchasing shares.

So what are the readings today? Based on hefty transaction volume, Vickers’ benchmark NYSE/ASE One-Week Sell/Buy Ratio is 0.33, and the Total one-week reading is 0.35. Insiders are not just buying shares; they are devouring shares. Insiders behaved similarly in late December 2018, after stocks crashed on Christmas Eve; in early 2016, when stocks also corrected; and in late 2008/early 2009, at the depths of the Great Recession correction. Those were spectacular times to buy stocks. Insiders seem to be telling us that today offers a similar opportunity. https://yhoo.it/2TV0cE2

Insider Buying: Usually, Signals Market bottoms

These guys might not have a pulse on the economy, but they have the inner workings of their companies like the back of their hands. We have yet another powerful indicator that this massive pullback is a once in a generational buying opportunity.

After looking at the charts and the sentiment, this is probably one of the best buying opportunities individuals have had since 1987. We say the best because this massive pullback did not occur because of bullish sentiment; the crowd was uncertain before Coronavirus was even an issue. Hence this pullback/crash took place on a note of uncertainty. It’s unprecedented as that has never occurred before, meaning the melt-up will be equally spectacular.

We will issue our premium service subscribers’ entry points for several plays, like GOOGL, PNC, INTC, NFLX, FB, etc. Large caps stocks tend to perform better during the first stages of the recovery phase.

Historical examples of Tactical Investor Dow 30 Plays

NKE

One could have opened positions from April to late July 2017 and sold roughly in October 2018. The idea is not to try to time the exact bottom or sell at the very top but to get in when the stock trades in the extremely oversold range and to sell when it moves to the highly overbought range. One could have got into the 50 to 55 range and closed the position in the 73 to 76 range, for a gain of roughly 41% if we take the midway point on the entry and exit prices.

Even 35% is an excellent gain considering the average yield on the dogs of the Dow for the past 20 years has been 10.8%. NKE is moving into the buy zone again.

PG

Long positions could have been opened from Sept to Nov 2018 in the 73 to 78 range. Positions could have been closed out in the 118 to 122 dollars for an average gain of 58%, holding time of roughly 12 months.

Good Dow 30 Stocks to Consider March 2023 Update

The following three stocks make sense: HD, MMM and CAT.

Overview of Investing in the Dow 30 stocks

Investing in the Dow 30 stocks can be brilliant for investors looking for stable, long-term growth. The Dow 30, also known as the Dow Jones Industrial Average, is a collection of 30 large-cap stocks considered blue-chip companies. These companies are leaders in their respective industries and have solid financial stability and growth history.

One of the benefits of investing in the Dow 30 is its diversification. The Dow 30 comprises companies from various industries, including healthcare, technology, finance, and energy. This diversification can help reduce the overall risk of an investor’s portfolio. In addition, the Dow 30 stocks are often viewed as a barometer of the overall stock market, making them a good indicator of market trends.

Another benefit of investing in the Dow 30 is its long-term track record of growth. Over the past century, the Dow 30 has delivered an average annual return of around 5-6%. While this may not seem like an impressive return, it is essential to remember that the Dow 30 is a long-term investment. Over time, the compounding effect of these returns can add up to significant wealth accumulation.

Investors can also benefit from the dividends many Dow 30 companies paid. These dividends can provide a steady income stream for investors, and many of the companies in the Dow 30 have a history of increasing their dividend payouts over time.

Risks of investing in the Dow 30 Stocks

Despite the benefits, investing in the Dow 30 does come with some risks. Like all investments, there is the potential for market volatility and losses. Investors should also know the concentration risk of investing in just 30 companies. Additionally, while the Dow 30 may be a good indicator of overall market trends, it does not always represent the entire stock market.

Investing in the Dow 30 stocks can provide diversification, long-term growth, and a steady income stream through dividends. However, investors should consider their investment goals, risk tolerance, and horizon before investing in the Dow 30. With careful consideration and a long-term perspective, investing in the Dow 30 can be wise for investors seeking stable, long-term growth.

Random suggestions: Coping with market crashes.

Mass Psychology advocates that stock market crashes are nothing but long-term buying opportunities. Pull up a long-term chart, and you will be forced to arrive at the same conclusion. The Big player’s game strategy is to get individuals to focus on words such as bear market, crash, and end of the world, etc.; in doing so, the crowd focuses on the tree and forgets the forest.

Small Dogs Vs Big Dogs of the Dow

The Small Dogs of the Dow theory is a variation of the Dogs of the Dow investment strategy, which involves investing in the ten highest-yielding stocks in the Dow Jones Industrial Average (DJIA). The Small Dogs of the Dow theory invests in the five lowest-priced stocks among the Dogs of the Dow rather than the ten highest-yielding ones. While both strategies aim to provide higher returns than the DJIA, evidence suggests that the Small Dogs of the Dow theory may be a better investment strategy.

One study conducted by Investopedia compared the performance of the Dogs of the Dow strategy and the Small Dogs of the Dow strategy from 2001 to 2019. The study found that the Small Dogs of the Dow strategy outperformed the Dogs of the Dow strategy, with an average annual return of 9.9% compared to 8.6%. The study also found that the Small Dogs of the Dow strategy had lower volatility than the Dogs of the Dow strategy, with a standard deviation of 12.3% compared to 13.7%.

Another study conducted by Investopedia looked at the performance of the Dogs of the Dow strategy, the Small Dogs of the Dow strategy, and the DJIA from 1992 to 2017. The study found that the Small Dogs of the Dow strategy had the highest average annual return of the three strategies, at 13.2%, compared to 10.4% for the Dogs of the Dow strategy and 9.4% for the DJIA.

References

“Why invest in the Dow Jones Industrial Average?” by Investopedia:
https://www.investopedia.com/articles/investing/082815/why-invest-dow-jones-industrial-average.asp
This article discusses how investing in the Dow 30 stocks provides exposure to a diverse range of industries, with many of the companies being market leaders. It also highlights the historical performance of the Dow, including its long-term growth and stability.

“Why Investing in the Dow Jones Industrial Average Is a Smart Move” by The Motley Fool:
https://www.fool.com/investing/why-investing-in-the-dow-jones-industrial-average-i.aspx
This article outlines several reasons why investing in the Dow 30 stocks is bright, including their reputation for stability and long-term growth potential. It also discusses the benefits of investing in a diversified portfolio of blue-chip companies.

Reasons Why You Should Invest in the Dow Jones Industrial Average” by U.S. News & World Report:
https://money.usnews.com/investing/stock-market-news/slideshows/5-reasons-why-you-should-invest-in-the-dow-jones-industrial-average
This slideshow-style article highlights five reasons why investing in the Dow 30 stocks can be an intelligent choice, including the fact that it provides broad exposure to the stock market, is composed of large-cap companies with proven track records, and is a relatively stable investment option. It also touches on the importance of diversification and the potential for long-term growth.

Dow Jones Industrial Average (DJIA). (n.d.). Investopedia. Retrieved from https://www.investopedia.com/terms/d/djia.asp

Brown, C. (2021, February 9). 5 Benefits of Investing in the Dow Jones Industrial Average. U.S. News & World Report. Retrieved from https://money.usnews.com/investing/stock-market-news/articles/benefits-of-investing-in-the-dow-jones-industrial-average

Dow 30 Stocks: What Do They Reveal