As we head into a new week, it will be interesting to see how the market continues to react to earnings season and all of the political news. I was struggling with how to approach this week’s topic when Sophia, my daughter, walked by my desk and plopped down a small stuffed owl.
“This will give you a good idea Mom. They’re smart.”
Corporate America will continue to report earnings this week and some volatility is to be expected. We certainly saw a decline in the Dow Jones Industrial Average last Friday partly due to McDonald’s report.
I hope the following will put some perspective on these periods. Earnings season is a time to read and look for opportunity.
Certain investors become very nervous when they see a decline in the Dow Jones Industrial Average (DJIA). I understand this. The recession has made us cautious but it’s important to always remember exactly what the DJIA is. It’s a snapshot of 30 companies. Know who they are.
Alcoa, American Express, Boeing, Bank of America, Caterpillar, Cisco, Chevron, E.I. du Pont, Walt Disney, General Electric, Home Depot, Hewlett-Packard, IBM, Intel, Johnson and Johnson, JP Morgan Chase, Coca-Cola, McDonald’s, 3M, Merck, Microsoft, Pfizer, Procter and Gamble, ATT, Traveler’s, United Health, United Technologies, Verizon, Wal-Mart and Exxon.
Before you react to the performance of the DJIA, be sure to know the correlation of it to your portfolio. Call if you need to.
Owls Could Invest
My advice for getting through this and future earnings seasons as well as the election is to behave more like an owl.
It may be better to be more nocturnal and let the chaotic pace of news and markets pass. The evening brings clarity on day’s events and can provide excellent hunting opportunities.
Keep your eyes forward and look for small ways to try and capitalize on the current events.
Of course, if your head actually spins all the way around, let me help!
Until next week,
Things to remember: Opinions above are for informational purposes only and should not be taken as specific investment advice. Consult your advisor before investing. All indices like the DJIA are unmanaged and may not be invested into directly.