It’s been a good month for the Dow: NDJI makes it yours

There’s no doubt that it’s been a tough year for US equities, with the major equity indices all hitting a bear market in the second half of the year. Despite the underperformance of equities, the Dow Jones Industrial Average has been quietly treading water for much of the year and is currently well above its technical indicators, a strong buy signal for savvy advisors.

The Dow is made up of just 30 companies and has been able to capitalize on a number of wins this year, such as positive earnings reports, while limiting the impact of underperforming sectors such as information technology which have weighed heavily on the S&P 500 and the Nasdaq. . It has helped the market-cap-weighted index outperform other major equity indices this year and is currently above its 200-day simple moving average and 50-day SMA as well, a major buy signal for anyone relying on trend following. .

It's been a good month for the Dow: NDJI makes it yours

The Dow Jones Industrial Average is one of the oldest of all US equity indices, and although it has its roots in the industrial sector, it has extended beyond to incorporate well-established companies in many industries. major – except transport and utilities. . These companies, referred to as blue chip companies, are a popular haven during tough economic times due to their proven track record of performance and reliability.

The Dow Jones made great strides in November and hit 9% above its 50-day moving average on 11/25: The DMA takes the simple moving average and moves it forward or backward in time, usually to better identify trend directions. This is only the eighth time this has happened since 1990 according to Tailor-made investment group.

It's been a good month for the Dow: NDJI makes it yours

Source of images: Bespoke Invest Twitter

There are only two ETFs that specifically track the Dow Jones Industrial Average, but only one is actively managed and offers the potential to generate monthly income while seeking to smooth out volatility: the Dow Jones® National Managed Income Risk ETF (NDJI)which uses an options tunnel that aims to reduce volatility and provide a measure of downside protection.

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