Dow 30 Stocks

Updated Dec 31, 2023

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

The Dow Jones Industrial Average (DJIA), or simply the Dow 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

The Dow Jones Industrial Average (DJIA), often hailed as “the Dow,” is a venerable indicator of the stock market’s pulse. Comprising 30 key U.S. companies, the Dow 30 stocks mirror diverse economic sectors, rendering them pivotal for market assessments.

Embracing the Tactical Investor Alternative Dow theory, the performance of Dow utilities takes centre stage. It posits that utility companies, embedded within the Dow, serve as a leading indicator. A robust showing in utilities, symbolized by a new high in the ETF IDU, may foretell a parallel trajectory for the Dow and the broader market.

Enter the “Small Dogs of the Dow” strategy, a unique approach involving the purchase of the 5 lowest-priced stocks among the top 10 highest dividend-yielding stocks in the Dow Jones Industrial Average. Rooted in the belief that high-yield, low-priced blue-chip companies hold the potential for substantial price appreciation, this strategy invites investors to explore hidden opportunities.

Harnessing the potency of mass psychology enhances precision in market entry points. Following a substantial pullback, especially when bearish sentiment soars (readings at 60 or higher), presents an opportunity for consideration. When coupled with stocks trading in the highly oversold range on the monthly chart, risk-takers may find an opportune moment to enter the market assertively.

However, it’s crucial to note that these strategies are most effective when part of a comprehensive approach. Factors like a company’s financial health, prevailing market conditions, and overarching economic trends should also be weighed. For prudent decision-making, consulting with a financial advisor or conducting thorough research is always recommended before making any investment choices.

Tactical Investor Dogs Of the Dow Theory

The Tactical Investor Dogs of the Dow Theory is a unique approach to the traditional Dow strategy. This theory focuses on two main factors: the trend of the stock and the risk-to-reward ratio.

The first factor to consider is the trend of the stock. If the trend is positive (bullish), it indicates that the stock’s price is likely to increase. This is a good sign for investors as it suggests profit potential.

The second factor is whether the stock trades in the monthly charts’ remarkably or insanely oversold ranges. When a stock is oversold, it has been aggressively sold, and its price has fallen. This could indicate a buying opportunity as the stock may be undervalued and could rebound.

The risk-to-reward ratio is another crucial factor in this theory. This ratio compares a trade’s potential loss (risk) with the potential profit (reward). A favourable risk-to-reward ratio means the potential reward outweighs the risk, making the trade more attractive.

While the traditional Dogs of the Dow strategy focuses on the ten highest-dividend-yielding stocks, the Tactical Investor Dogs of the Dow Theory does not consider the dividend factor. If a stock pays a high dividend, it’s regarded as a bonus, but it’s not a requirement or a deciding factor in this strategy.

The Tactical Investor Dogs of the Dow Theory offers a different approach to the traditional Dow strategy. This theory aims to identify the best possible investment opportunities, regardless of the dividend yield by focusing on the trend, oversold status, and risk-to-reward ratio of a stock. This approach aligns with the idea of being objective, rational, and sound, and different from the policy followed by most investors.

Understanding Risk in Shorter Timelines

The concept of “the shorter the timeline, the higher the risk factor” is a common understanding in trading and investment. This is because shorter timelines often involve more volatility and less predictability. **Volatility** is a statistical measure of the dispersion of returns for a given security or market index, and it can significantly impact short-term trading.

Many traders may feel compelled to focus on shorter timelines, believing they can capitalize on quick market movements. However, this approach can lead to increased stress and sleepless nights. The constant need to monitor the market and make quick decisions can be mentally and emotionally draining.

On the other hand, focusing on longer timelines, such as weekly charts, can provide a more comprehensive view of market trends. Each bar in a weekly chart represents one week’s worth of data, offering a broader perspective on market movements. This approach can be less stressful as it doesn’t require constant monitoring and quick decision-making.

Some stocks are highly volatile, meaning their prices can fluctuate dramatically quickly. When the weekly chart issues a sell signal, these stocks can shed up to 30% from their highs before rebounding strongly. Traders can use these charts to identify opportunities to jump in and out of stock or use a sharp pullback to open additional long positions, provided the risk-to-reward factor is in their favour.

While shorter timelines can offer opportunities for quick gains, they also come with higher risk and stress. Longer timelines, such as weekly charts, can provide a more balanced approach to trading, allowing for careful analysis of market trends and more strategic decision-making. As always, it’s crucial to consider the risk-to-reward factor when making any trading decisions.

Strategic Selection: NKE and DIS as Promising Dow Prospects for 2024

In the realm of Dow contenders for the upcoming year, Nike (NKE) and Disney (DIS) emerge as noteworthy candidates. Observing the market landscape, a prudent approach involves biding time until 2024, allowing the markets to release some steam. Post-cooldown, consider adopting a gradual investment strategy, with both NKE and DIS showcasing potential as sound additions to a diversified portfolio. The careful selection of these stocks aligns with a strategic outlook, combining patience with an opportunistic approach for sustained growth.

Examining our topic through a historical lens serves two key purposes. Firstly, it teaches us from the past to avoid repeating mistakes. Secondly, it reveals how our strategies translate into action over time, showcasing our ability to talk the talk and walk the walk in the ever-changing financial landscape.

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-generation 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 gotten 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 September to November 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 those 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, at 13.2%, compared to 10.4% for the Dogs of the Dow strategy and 9.4% for the DJIA.