EDOW

daviddjg0033

This is the way I thought of DIA Dow represents a more diversified portfolio than the tech heavy qqqs or even the spy500. Financials make up more of the index today but historically it was energy. It is not industrials that is now XLI/VIS. The future will probably have a more tech focused index. The dogs of the dow often rally for a catch up trade - EDOW is an equal weight dow.

Revfunky

The real work is about respecting the primary trend. Don’t fight trends. Your job as an investor is to ride the trend not get in the way. If you have to fight the trend you better have a damn good reason. Asset prices trend. A stock breaking out to new highs is far more likely to keep climbing than to suddenly collapse. Fighting the trend is a losing game. Remember when all those people lied to you about how it was only seven stocks that were driving this market? They weren't counting. They were fighting trends. And they were wrong. Meanwhile, here's reality: The Equal-Weight Dow Jones Industrial Average (EDOW) and the Equal-Weight S&P 500 (RSP) just closed the week at their highest levels ever. That’s not just seven stocks, that’s a bull market. One day the data will tell us the trend is lower. Today is not that day.

95Daphne

BRK doesn't do tech, they do value. The pick isn't that surprising and well, even if it doesn't hold today, the Dow was going to hit a new record probably at any time if the market kept holding as in reality, it's held up much better internally than "being flat for months." EDOW places it at probably 46-47k if UNH wasn't leveled as badly as it was.

95Daphne

The only thing that's blocked this index from setting a handful of new ATHs with its large cap brothers is UnitedHealth. That's it. If you don't believe me, check EDOW. UNH was costing the Dow at least 2.5% as recently as last week. The dunking here is senseless though, in reality for now it's continued to hold well since its bear market bottom in 2022 and perfectly backtested prior cycle ATHs during the tariff tantrum in April. The index where the dunking makes more sense is the Russell 2000, but sadly you can include all of Biden's term here (tho you can date this back to Trump v1.0 too, it's only up 27% since August 2018).

95Daphne

Considering that the Dow is price-weighted, it's being affected heavily by the United Health mess. EDOW, which is the equal weight version, essentially places it just a slight tick behind its 2 large cap peers in correlation to its record instead of being behind sizably. To compare, it'd be about 3% higher if UNH hadn't crashed nearly 40% from earlier in the year. It's fine that it's lagging anyway. During the fake rallies in 2022, it would be the Dow that would be the closest to a previous ATH and that didn't work out. The fact that the Nasdaq is leading (and has jumped past retracement spots that would halt it if this was not a flash bear market) makes the move from early April legit. What also makes it legit is the stance we saw from early April was abandoned ("austerity for the greater good of the US, and tariff everyone up to their eyeballs"). The main beef you can have is with the Russell 2000/IJR, but really you can argue outside of 2020 and early 2021...this dates back to Trump v1.0 in 2018. The fun thing is that I've seen some options posted that suggest the pain/disappointment will continue in smalls while the show rolls on for tech.