Best & worst-looking Dow 30 charts right now
Dow Jones Industrial Average the only major stock index where diversification still lives
The S&P 500 (SPY) and Nasdaq 100 (QQQ) get all the street cred. Me? I’m a Dow 30 fan, but not because of the weighting system, where that set of blue chip stocks is allocated by stock price instead of the usual company size (a.k.a. market capitalization).
I like the Dow because, of the 3 major US stock market measures, it is the only one not currently overloaded with tech stocks. So when I look at the Dow 30, the holdings in ETF ticker DIA, I am not looking at their relative size. I am simply analyzing 30 companies that have been selected to try to represent the US economy. It is a manageable and diverse basket.
As I wrote here recently, one of the model portfolios I run (it is one of my personal favorites) takes the Dow 30, owns all of them at all times, but uses my ROAR Score to establish the weights.
The portfolio’s automated holdings via that method are updated every day at ROAR.PiTrade.com. Cash (BIL) is used to fill out that portfolio any time the 30 stock weights are not high enough to add to 100%.
Its backtested record starts on 1/1/2020. It shows that when we look at the Dow as something other than the longest-tenured US stock index with a quirky weighting pattern, and actually analyze those 30 stocks carefully, good things can happen.
As you see here, the ROAR Dow 30 portfolio (same stocks, tactical weighting method) has produced much more return with less risk than the standard DIA ETF.
That’s an automated portfolio, run based on the ROAR Score “algorithm” we created. And I created it as a way to help “set it and forget it.” For me, and anyone else who has access to it.
I managed money for more than 30 years before automating anything like that. And as our longtime subscribers know, I’m always looking for an edge. And I supplement my automated portfolio work and bond ladder with some shorter-term trading. Part of that is looking for opportunities within the Dow 30.
To that end, here’s a quick list of the 5 Dow stocks I find most attractive for trading purposes. And the 5 that look most vulnerable here. Here’s what that looks like.