Rich-Stock Picking
Are you a great stock picker?
Investing in stocks is not a simple process even if the strategy is based on the Dow Jones Industrial Average.* As you can see from the list below, the composition of the Dow has changed over time. And just because a company is in the Dow doesn’t mean that itstock will be a good investment.
Dow Jones Industrial Average History
The Dow Jones Industrial Average, comprised of 12 ‘smokestack’ companies, made its debut May 26, 1896. Twelve years earlier, Mr. Dow's initial stock average, containing 11 stocks (nine of which were railroad issues) appeared in Customer's Afternoon Letter, a daily two-page financial news bulletin that was the precursor of The Wall Street Journal. Here are the 12 stocks that made up the initial Dow Jones Industrial Average as of May 26, 1896. The Average consisted entirely of industrial stocks published for the first time:

American Cotton Oil Laclede Gas
American Sugar National Lead
American Tobacco North American Tennessee Coal & Iron
Chicago Gas U.S. Leather pfd.
Distilling & Cattle Feeding U.S. Rubber
General Electric    


The first average computed from this list of stocks was 40.94. It declined gradually during June and July and on August 8, 1896 stood at 28.48 which is the lowest point on record for the industrial average.

Imagine that 71 years ago, you could have invested $10,000 each in any five stocks in the Dow as listed below. When one company in the index was replaced by another, proceeds from the sale of the original company were invested in the new one. Based on that strategy, today you would have a portfolio of five of the well known companies listed below.

Sound simple enough?

Try picking the five companies you would want to own today. Then, click on the link below to see how well you did.

Alcoa (Replaced National Steel in 1959 which replaced Coca-Cola in 1935)
Altria Group (Formerly known as Phillip Morris, replaced General Foods in 1985)
American Express (Replaced Manville in 1982)
American International Group (AIG) (substituted for International Paper in 2004, which replaced Loew's in 1956)
Boeing (replaced Inco in 1987)
Caterpillar (replaced Navistar International in 1991)
Citigroup (formerly known as Travelers, replaced Westinghouse in 1997)
Coca-Cola (replaced Owens-Illinois in 1987, which replaced National Distillers in 1959 which replaced United
Aircraft in 1934)
Disney (replaced USX in 1991)
DuPont (replaced Borden in 1935)
Exxon Mobil
General Electric
General Motors
Hewlett-Packard (replaced Texaco in 1997)
Home Depot (substituted for Sears, Roebuck in 1999)
Honeywell International
IBM (replaced Chrysler in 1979)
Intel (substituted for Chevron in 1999)
Johnson & Johnson (replaced Bethlehem Steel in 1997)
JP Morgan Chase & Co. (replaced Primerica in 1991, which replaced American Can in 1988)
McDonald's (replaced American Brands in 1985)
Merck (replaced Esmark in 1979, which replaced Corn Products in 1959)
Microsoft (substituted for Union Carbide in 1999)
Pfizer (substituted for Eastman Kodak in 2004)
Proctor & Gamble
SBC Communication (substituted for Goodyear in 1999)
3 M (replaced Anaconda in 1976, which replaced American Smelting in 1959)
United Technologies (replaced Nash-Kelvinator in 1939)
Verizon Communications (replaced AT&T in 2004, which replaced IBM in 1939)
Wal-Mart Stores (replaced Woolworth in 1997)


So how did you do? Click on the link below to find out how good you are at stock picking
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