The Dow Jones Industrial Average is the world’s most important stock market index.
While many think the “pros” use the S&P500 because they may be benchmarked to it, those “pros” are not your problem.
DON’T FIGHT PAPA DOW, is how I learned it.
If you get the Dow 30 right, you’ll get the S&P500 right.
And if you’re going to do a sum of the parts analysis, would you rather try to get the direction of 30 stocks right? Or 500?
With the S&P500 already hitting new 52-week highs, do you think the Dow is next?
They look the same don’t they?
And if that hasn’t convinced you, then just zoom out.
This chart below goes back to the 1960s.
Tell me one behaves differently than the other. I dare you.
So like I said, some investors think they’re too cool for the Dow.
They think they’re so profesh that they’re above it.
“It’s a price weighted index, JC. That’s stupid”.
“It’s only 30 stocks, JC. It’s not diversified enough”.
But they move together. They look the same.
So the joke is on you.
On this week’s call, we went over a list of some of the best performing Dow components, including the implications of could happen if its largest component starts to rally in the back half of this year.
Premium Members can watch the replay of our video call here.
Let me know what you think!