Tag Archives: DJIA

Index Basics: Calculating an Index’s Total Return

Total return indices deserve more attention.  They more closely represent what an investor actually takes home: the return of an index, plus dividends paid and reinvested in the index.  Their better-known counterparts, which only track price changes in securities—often called “price return indices”1—get all the fanfare (see “Dow Hits 20,000 for the First Time”).  Total Read more […]

The Dow Quickly Takes a Long Time to Hit 20,000

Walt Whitman said in Song of Myself “Do I contradict myself? Very well, then I contradict myself, I am large, I contain multitudes.”  Well, as does The Dow Jones Industrial Average – so I’ll present two contradictory data points from today’s record close. First, the move from 19,000 to 20,000 was quick, happening in just Read more […]

Minimizing the Pain of Regret

There are many extraordinarily talented minds engineering optimal portfolios, objectives of which include maximizing return per unit of risk, among others.  The capital asset pricing model (CAPM) posited the market portfolio as optimal in the mean/variance sense, but over the years, this notion has been questioned.  CAPM, like the efficient markets hypothesis (EMH), will likely Read more […]

The Red Zone

In grid-iron football, The Red Zone refers to the area between the 25 yard line and the goal line, the last remaining ground the offense must battle through in order to score a touchdown.  This is a somewhat apt metaphor for what we’re currently witnessing with the Dow Jones Industrial Average. Unless you’ve been living Read more […]

Dow Jones Industrial Average® 2016 Year in Review

The Dow Jones Industrial Average ended 2016 at 19,762.60 – up 2.337.57 points for a 13.42% annual return, the best year since 2013 when the market surged over 26%. Biggest Themes – markets were driven by the crash (and partial recovery) in oil prices, Fed-watching, China, Brexit and questions regarding the US economy. Oh yeah, Read more […]

Volatility, Short- and Long-term

This morning’s Financial Times highlighted a study of market volatility suggesting that return and volatility are inversely related — that “the correct response to an increase in volatility…is to exit the market.” This is certainly true in the short run, as the table below confirms. In months when the realized volatility of the S&P 500 was above Read more […]

Dow Jones Industrial Average – 2015 Year in Review

The Dow Jones Industrial Average ended 2015 at 17,425.03 – down 398.04 points on the year for a -2.23% annual return. Leader & Laggard – Nike (NKE) was the biggest contributor during 2015; Walmart (WMT) was the biggest detractor. Industry Performance – Consumer Services was the leading industry for the year; technology the worst. Worst Read more […]

Dow Jones Industrial Average Q3 2015 Performance Report Card

The Dow Jones Industrial Average ended September at 16,284.70 – down 1,538.37 points year to date for a -8.63% return. Q3 2015 was the worst calendar quarter since Q3 2011. Leader & Laggard – Nike (NKE) was the biggest contributor during Q3; Goldman Sachs (GS) was the biggest detractor. Industry Performance – the Consumer Goods Read more […]

Apple Set to Join the Dow Jones Industrial Average

S&P Dow Jones Indices announced that Apple (AAPL) will be added to the Dow Jones Industrial Average, replacing AT&T (T), after the close of business on March 18, 2015; release attached. All data is based on last night’s close, and will be finalized after the close of March 18, 2015.  American Telephone & Telegraph was Read more […]

Market Myopia

As investors, we necessarily rely on history.  How we analyse that history is particular to each investor – some will look for technical patterns, some at fundamental data, still others will build quantitative models.  But all of us need data, and history is our only source. We may have to rely on history; we don’t Read more […]