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Dow up 6% this year?!?!? Must be a typo!
Old 12-31-2011, 12:46 PM   #1
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Dow up 6% this year?!?!? Must be a typo!

The headline in today's WSJ says the DOW was up almost 6% this year.
Some dope putting his money into an index fund of the S&P 500 would have broken even.

How can this be?

The good folkswho keep these records must have miscalculated or started celebrating the new year too early.

We all know that the political situation is a mess, the US Government was downgraded, Europe is in a Euro crisis, there was upheaval in the Mid-East, earthquakes and Sunami in Japan, wars and threats of war abound, and the list of bad news goes on.

Obvioulsy, these people should be looking at huge losses in their portfolios. Somebody figured things wrong.
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Old 12-31-2011, 01:21 PM   #2
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The headline in today's WSJ says the DOW was up almost 6% this year.
Some dope putting his money into an index fund of the S&P 500 would have broken even.

How can this be?
DOW is up 640 points or 5.5% The S&P on the other hand is up .04 points or 0%. Who does a DOW index strategy?
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Old 12-31-2011, 01:37 PM   #3
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DOW is up 640 points or 5.5% The S&P on the other hand is up .04 points or 0%. Who does a DOW index strategy?
Good question! I guess we could all pour our money into the DOW for 2012 and chase last year's winning stategy. But... isn't that the usual mistake?
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Old 12-31-2011, 01:55 PM   #4
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It makes for good press, looking at 30 large, publicly owned companies based in the United States.

However, it's not (I hope) the way most folks invest - if they invest at all.

Just some more "financial porn", using an actual fact to whitewash the entire (global) market....
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Old 12-31-2011, 02:52 PM   #5
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DOW is up 640 points or 5.5% The S&P on the other hand is up .04 points or 0%. Who does a DOW index strategy?
There seem to be quite a few DJIA stocks in the dividend focus funds, and these rose more than the S&P. Even the S&P paid a 2% dividend, so it was not flat.
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Old 12-31-2011, 03:06 PM   #6
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It is worth noting that all of the headline number exclude dividends which add to the return. 10K invested in Vanguard S&P index Admiral fund would worth $10,208 and in Dow Jows Diamonds (DIA) would worth $10,773. Vanguard total stock market $10,108

Nothing to write home about but better than a money market or even a 1 year CD.
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Old 12-31-2011, 04:09 PM   #7
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25% of the increase in the DOW is due to one stock. McDonalds.
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Old 01-01-2012, 12:03 AM   #8
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The 2 big winners that drove the 6% increase were IBM and McDonalds.

Now if you followed Sy Harding's Season Timing Signal system you'd be up a nice 16% "Our Seasonal Timing Strategy portfolio was up 15.8% for the year". If you just sold at the end of April and bought back in at mid October to save the cost of the subscription because you did not want all the info since you wouldn't act on it you'd probably be up at least 12%. The STS doesn't work every year but typically does, 2009 was the exception.

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Old 01-01-2012, 09:09 AM   #9
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I guess we could all pour our money into the DOW for 2012 and chase last year's winning stategy.
You think the DOW was the winning strategy, what about long term gov't bonds
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Old 01-03-2012, 09:44 PM   #10
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Quote:
Originally Posted by donheff View Post
DOW is up 640 points or 5.5% The S&P on the other hand is up .04 points or 0%.
Quote:
Originally Posted by MichaelB View Post
There seem to be quite a few DJIA stocks in the dividend focus funds, and these rose more than the S&P. Even the S&P paid a 2% dividend, so it was not flat.
Quote:
Originally Posted by clifp View Post
It is worth noting that all of the headline number exclude dividends which add to the return. 10K invested in Vanguard S&P index Admiral fund would worth $10,208 and in Dow Jows Diamonds (DIA) would worth $10,773. Vanguard total stock market $10,108
Here are some more stats for reference. The inflation in the 12 months ending last November was 3.5%. So, most investors lost money after inflation.

Silver lining? The S&P forward P/E is 12, vs. its normal average of 15, while the 10-year T-note yield is at 1.88%!

Buy, buy, buy... 71% equity right now. Do I go 80 or 90? Heh heh heh...
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