These 4 Stocks Are the Dow's Real Long-Term Winners

Don't get caught up in fifth-anniversary bull-market hype. There's a better way to judge winners.

Mar 8, 2014 at 11:01AM

This weekend, investors are celebrating the fifth anniversary of the bear-market low for the Dow Jones Industrials (DJINDICES:^DJI). By looking at which stocks have gained the most during the bull-market run since early 2009, you might think that you've found the stocks that will be the best long-term performers in your portfolio. But the better way to measure success is by including both bull-market and bear-market performance, measuring from peak to peak rather than from low to high. When you judge the Dow's performance that way, four stocks stand out as having had the best performance between the market's pre-meltdown highs in October 2007 and now: Home Depot (NYSE:HD), Nike (NYSE:NKE), Disney (NYSE:DIS), and McDonald's (NYSE:MCD).

HD Total Return Price Chart

Dow Total Return Price data by YCharts.

The most striking thing about these performers is that they all reached their long-term success in different ways. McDonald's won't show up on any high-performing screens over the past five years for a simple reason: its post-bear-market performance hasn't been all that strong. But alone among these top four stocks, the fast-food giant managed to avoid the bear market entirely, starting from a higher level in early 2009 and making even its more modest gains hold up during the ensuing bull-market run. Even the stock's lackluster performance over the past two years hasn't kept it from making the top four.

On the other hand, Disney was the closest to mirroring the full extent of the Dow's drop in 2008 and early 2009, as the entertainment company hadn't yet established how it would recover from the deepest recession in decades. Yet in the summer of 2009, Disney made the aggressive move of paying $4 billion for Marvel Entertainment, setting the stage for what has been one of its strongest growth drivers in recent years. With so many franchise opportunities for the company's movie-studio business, Disney now finds itself in a strong position to leverage the assets it obtained from Marvel and more recently Lucasfilm across its spectrum of media and entertainment properties.

Splitting the difference were Home Depot and Nike. Home Depot actually performed worse than the Dow during the run-up to the financial crisis, as the collapse of the housing market preceded the full brunt of the market meltdown and left the home-improvement retailer without a clear strategy to recover. Yet by focusing on helping customers with must-do projects tailored to help those stuck in their current homes and to make hard-to-sell homes more marketable, Home Depot managed to get more efficient and keep itself on track to reach its long-term goals. When housing finally did recover, Home Depot was in an even better to reap the rewards.

Nike, of course, wasn't even in the Dow during the whole period, but its performance nevertheless plowed a middle-ground among the other three high-flying stocks. Nike didn't lose as much as its peers during 2008 and early 2009, as its name-brand recognition helped it avoid the full brunt of the recession. Yet even in the face of competition, Nike has managed to keep up its growth and look to expand into new markets, with the most recent foray being its push into soccer in anticipation of the 2014 World Cup.

Many stocks have had better performance than these four over the past five years. But in terms of long-term consistency through good times and bad, these four stocks are the best in the Dow, and as you consider the potential for future downturns, keep that in mind as you create the best portfolio for your financial goals.

Think long-term
There's no better holding period for a stock than forever. But you have to pick the right stocks to succeed with that strategy. That's why our CEO, legendary investor Tom Gardner, 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. 

Dan Caplinger owns shares of Walt Disney. The Motley Fool recommends Home Depot, McDonald's, Nike, and Walt Disney and owns shares of McDonald's, Nike, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers