- November 27, 2019
- Posted by: Parker Evans
- Category: Brokers, Financial Planning, Financial Planning and Investment Blog, Stocks, Wealth Management
Mutual fund marketing material often makes the spurious claim: “You cannot invest directly in an index.” We disagree. You can, in fact, invest directly in an index-based stock portfolio. No mutual fund or ETF needed. This paper begins with a brief history of the Dow Jones Index and its methodology. We review historical index returns. You will learn how to create your own portfolio that precisely replicates the Dow Jones Composite Average™ . We then provide seven clear and concise tips on how you might customize a index-based portfolio to seek superior investment returns.
The Dow Jones Composite Average consists of sixty-five component stocks. The Dow Jones Composite includes the thirty component stocks of the Dow Jones Industrial Average™, the twenty stocks of the Dow Jones Transportation Average™ , and the fifteen stocks in the Dow Jones Utility Average™ .