How to Invest in the DOW Index
Investing in the DOW index is a good way to invest in the U.S. economy. It is also a good way to diversify. This article provides some suggestions of how to effectively invest in the DOW.
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The Dow Jones Industrial Average (DOW) is an index of 30 stocks of large U.S. companies. It is a good barometer of how the United States economy is doing. Investing in the DOW is a great way to diversify. It is also a great way to make money (although perhaps not lately). Over the last 20 years, the DOW has returned an average of 13% per year. If you'd invested $10,000 in a DOW index fund 20 years ago you would have over $110,000 today.
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There are many different ways to invest in the DOW. There are hundreds of index funds that mirror the performance of the DOW. One of the most popular is the iShares Dow Jones U.S. Index Fund ETF. Its ticker symbol is IYY.
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There are also a few more advanced ways to invest in the DOW. * If you think the DOW will go up, consider Proshares Ultra DOW 30 (ticker: DDM). Proshares Ultra DOW 30 is an ETF (Exchange-Traded Fund) that seeks to double the performance of the DOW. So basically, if the DOW goes up 3%, this ETF will go up roughly 6%. Also, if the DOW goes down 2%, this stock will go down roughly 4%. So the investment can be quite risky. But if you think we have already hit a bottom, it might be worth a look. * If you think the DOW will go down, consider Proshares Ultrashort DOW 30 (ticker: DXD). Similar to the previous example, this stock doubles what the DOW does. But the advantage with this one is if you think the market is still going to go down, this will help you make money. So if the DOW goes down 3%, this stock will go up roughly 6%. But if the S&P 500 goes up 2%, this stock will go down 4%. These two options are very risky. But the greater the risk, the greater the potential return. I would recommend sufficient research on the market before purchasing either of these investments. Good luck and please feel free to ask questions!
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