Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



These 4 Dow Stocks Are Buy-And-Hold Favorites

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Many investors choose the stocks in the Dow Jones Industrials (DJINDICES: ^DJI  ) because they are all well-known stalwart companies, are typically leaders in their respective industries, and generally have reliable competitive advantages over their rivals. But because of their popularity, many of the Dow's stocks are obvious targets for short-term traders looking to capture profits over much shorter periods of time than typical long-term investors. For those focused on the long run, it's easier to avoid stocks that get a lot of trading attention and instead concentrate on those that largely escape notice. When you look at the stocks with the lowest typical dollar-value volume in the Dow, the four names that come to the top of the list are Travelers (NYSE: TRV  ) , DuPont (NYSE: DD  ) , Nike (NYSE: NKE  ) , and Wal-Mart (NYSE: WMT  ) .

Apart from having relatively low daily trading volume of $175 million-$325 million, what these companies have in common are business models that make them unusually predictable, with few needs to innovate or come up with surprising new products or services to produce growth. Insurer Travelers moves in cycles depending on the loss experience via unpredictable catastrophic events in the world, with premium pricing increases boosting profitability in the periods immediately following big losses, before eventually giving way to higher competition and erosion of pricing power. Similarly, megaretailer Wal-Mart has to navigate the changing trajectories of the consumer economy, giving customers what they need at the prices they can afford at any given time. But both companies have well-worn ways of doing business that don't lend themselves to short-term fluctuations.

That's not to say that these companies don't make potentially game-changing moves. DuPont has been transforming its business, adapting to long-term trends that have made its agricultural segment a much higher-growth prospect than its legacy industrial chemicals business. Nike has had to respond to rising competitive pressures from upstart competitors, and the incursion of technology into the athletic apparel field has put it in the role of tech innovator with its Nike+ FuelBand and possible future wearable offerings.

For the most part, though, the macroeconomic trends that move these stocks are measured in months and years rather than minutes and days, and most of their strategic shifts are telegraphed well in advance. That makes it far easier for their shareholders to ignore the day-to-day noise in stock prices and instead focus on the fundamentals that drive these companies' long-term prospects. For true long-term investors, being able to shut out distractions can be an invaluable tool in making smarter investing decisions.

Your goal: finding forever stocks
Long-term investors benefit when they can find businesses they can count on for decades. That's the quest that our CEO, legendary investor Tom Gardner, is on, and he has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (2) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 15, 2014, at 5:26 PM, funfundvierzig wrote:

    BUY & HOLD investors who haplessly held on to the shares of the much shrunken and shrinking DuPont Company for the entire 21st century to date have been rewarded with zero capital appreciation. Indeed, DD has never recovered from its peak price set 16 years ago in 1998 @ 84 and change.


  • Report this Comment On January 15, 2014, at 5:32 PM, funfundvierzig wrote:

    The DuPont of 2014 is decidedly not a "leader in its respective industry". Ellen Kullman, DuPont Chieftess, is about to ditch 200 years of core competency in chemicals, and spin off her chemicals unit comprised of Teflon, TIO2, acids, refrigerants, and other chemicals.

    What is left of DuPont, the remnants are primarily comprised of DuPont AG & NUT businesses, where DuPont is second-place to Monsanto in seeds, and to Syngenta in crop protection, and to Novozymes in enzymes and food additives.

    Ironically, DuPont Titanium Technologies (TIO2), is about the last business in which DuPont is the true global leader and largest producer.


Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2796682, ~/Articles/ArticleHandler.aspx, 8/30/2015 12:11:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^DJI $16643.01 Down -11.76 -0.07%
DD $51.84 Down -0.18 -0.35%
E.I. du Pont de Ne… CAPS Rating: *****
NKE $112.50 Down -0.12 -0.11%
Nike CAPS Rating: *****
TRV $100.43 Down -0.97 -0.96%
The Travelers Comp… CAPS Rating: ****
WMT $64.94 Down -1.14 -1.73%
Wal-Mart Stores CAPS Rating: ***