When Dow Jones Investment Strategy is backtested, if one had invested $10,000 in 1949, and followed this strategy through to 2018, one would have in excess of $2.5M, before any expenses such as tax or brokerage fees are taken into account.
Long-term buy and hold strategy for the Dow Jones Industrial Average, hasn’t always outperformed the rate of inflation, as shown in the picture under this paragraph. One can see periods where the Dow’s price had plateaud for quite some time. Where as, the investment strategy explained in the next paragraph, has easily beaten the rate of inflation. We also like this strategy, as it has had recurring seasonal stock market patterns, and as one would only be invested for a total of 3 years maximum out of every 4 years, the downside risk is reduced, as opposed to a long-term buy and hold strategy. It is also easy to follow and there is minimal action required by investors.
To use this strategy one would find an Exchange Traded Fund (ETF), that tracks the Dow Jones Industrial Average index, and buy when MACD indicator enters into a upward trend after November 1st, during post election and midterm years. Then one would sell ETFs which were bought in the post election years, around April 30th the following year. When MACD indicator enters a downtrend sell ETFs which were bought in the midterm years, approximately 2.5 years later when MACD indicator enters a downtrend.
DOW Jones Investment Strategy Warning
Please be aware that even though this strategy has been profitable in the past, that doesn’t mean it will be profitable in the future. Also before buying any ETFs please conduct your own research as ETFs have different costs, commissions and fees.
1 Awesome Dow Jones Investment Strategy Conlusion
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