Only 30 stocks comprise the world’s most closely watched index – the Dow Jones Industrial Average – and its daily, weekly, monthly and annual gains (or losses) serve as a very handy – albeit simplistic – snapshot of investor sentiment and a decent barometer of how the U.S. and world economies are fairing.
Of course, comparing these select 30 stocks’ performance against one another over a one-year period is hardly a comprehensive or “fair” method to evaluate each company’s long- or short-term prospects. There are far too many factors – good and bad – that influence any stock’s performance over a 52-week period. And to merely be a member of this exclusive group probably means the company is doing – or has done – something right for quite some time.
Saying that, everybody loves a winner and if you or your clients held any of these top-performing Dow component stocks in their portfolios this year, there’s a pretty good chance they did quite well for themselves in 2011.
Larry Barrett writes for Financial Planning.