The Dow Jones Industrial Average
Investing in a diverse portfolio of Dow stocks looks like a sound strategy thus far, but there are still a few losers who have been left behind. The chart below shows the four Dow stocks in negative territory for 2012, compared with the Dow’s gain of more than six percent. Let’s dissect their performance and understand whether these stocks can boomerang in the months to come.
Old school, big tech
For the analysts, programmers, and bloggers who obsess over the tech sector, the Dow’s tech blue chips of yesteryear are rarely on their radar. Sure, IBM
Another big tech laggard in 2012 has been the networking giant, Cisco
A roller coaster ride
Dow components Caterpillar
Such broad exposure to international markets can be a boon if the global economy’s clicking on all cylinders, but managing across the various economic cycles can be difficult. Emerging markets will continue to play a crucial role for both companies, and expect steady investment in countries like China, Brazil, and India. The impressive run-up might be over, but slow-growth could be on the horizon due to their respective competitive positions and strong global brand.
Even the mighty can fall
The leaders in tech, manufacturing, and the restaurant-world can rise and fall like the tide. This year has dealt a blow to these Dow stocks, but the future could look much more promising. Investors need to conduct solid research to understand what makes these companies tick. For a deeper dive, dig into one of our brand new reports. Companies like Caterpillar might be the market leader today, but investors need to be aware of the risks posed by even the bluest of blue chip stocks. Read all about Caterpillar's strengths and weaknesses by downloading our premium analyst report now.
Isaac Pino owns none of the companies mentioned here. The Motley Fool owns shares of McDonald's, International Business Machines, and Cisco Systems. Motley Fool newsletter serviceshave recommended buying shares of McDonald's. Motley Fool newsletter serviceshave recommended creating a synthetic long position in International Business Machines. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.