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The Daily Dow LEXINGTON, KY. (November 1): By the thinnest of hairs, Caterpillar has replaced International Paper as the tenth-highest yielding Dow stock, so the Beating the Dow order gets shuffled quite a bit. Be prepared for more such moves if Caterpillar and International Paper swap back and forth in the near future.
DuPont's valiant effort couldn't hold the Foolish Four together today. With a lot of economic data to digest, the blue chips suffered from a mild case of heartburn today. But the diagnosis doesn't appear to be serious.
None of the Foolish Four stocks crossed the news wires with top stories today, so we can write off the day to "noise" and be content that as we begin the eleventh month of the year, once again the Dow Approaches are beating the overall market (which, in turn, are beating the typical mutual fund).
One of the most frequently asked questions about the Dow Dividend Approaches is whether there's a "best" time of the year to start. Normally, timing is an issue we completely ignore because once a Fool invests, she typically stays fully invested for many years, riding out short-term fluctuations.
And the evidence we've seen confirms our long-held contention that the approach can be started at any time very successfully. There is some evidence, however, to suggest that starting last in the year might boost your returns slightly. O'Higgins mentions this in his book and at least one web site has tracked monthly portfolios going back for a couple of decades, with the conclusion that the last few months seem to provide a jolt to your Dow portfolio.
The reasons are undoubtedly linked to the massive amounts of money invested by institutions, not necessarily in the Dow approach directly, but in all kinds of stocks. The portfolio tidying that money managers do late in the year (selling their dogs) may just allow us to pick up these already depressed stocks a tiny bit cheaper, and then get an extra rise early in the year.
I don't want to make too much of this blip in the numbers because it's still important to realize this approach works anytime. But if you're about to start a portfolio and are wondering whether to wait until we update the model in January, you might be better off getting in a couple of weeks before 1996 closes out.
Today's Dow Numbers
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