NEW YORK (Stockpickr) -- Everybody knows the Dow Jones Industrial Average. For more than a century, this blue-chip barometer has measured the health of America's flagship companies. What we don't know is which of the 30 Dow stocks will be the dogs and which will be the darlings from week to week -- but that can't stop us from making our best bets.
To come to a consensus on the top 10 Dow stocks, our
community is hosting a "Beat the Dow!" challenge. Anyone can participate: Just
for the Dow stocks you expect to outperform over the next few weeks. The 10 stocks with the most votes will be compiled into a group portfolio, weighted according to community sentiment. Will your stocks make the cut?
Voting will close on June 18, and the resulting community-selected portfolio will go up against the following challengers in true fight club fashion:
The Dow Jones Industrial Average
The SPDR Dow Jones Industrial Average ETF
The Dogs of the Dow
Our stand-in for the Dow will be the
SPDR Dow Jones Industrial Average ETF
, which changed its name from the Dow Diamonds ETF three months ago.
On June 1, the ETF, or exchange-traded fund, sold at a discount to net asset value of just 0.02%. The ETF closely tracks the index, though slight differences in the weightings of holdings as well as its tiny expense ratio of 0.167% come into play. As of May 28, the ETF lost 7.5% for the month, compared with a 7.9% drop in the index. Over the year ending May 28, the ETF gained 21.9% while the index rose 19.2%, with most of the difference being explained by a 2.56% index dividend yield.
We'll also see if our community portfolio can beat the
, the 10 highest-dividend-yielding stocks in the Dow. Dividend yields as high as 6.88% from
, 6.77% from
and 4.73% from
have become more attractive in this low-interest-rate environment.
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As a control group for this experiment, I will play the 10 highest-rated Dow components graded by TheStreet Ratings as the moderator's house portfolio. Our ratings were designed to be a 12-month outlook. Still, they do provide an unbiased presentation of the 10 Dow Industrial components with the strongest combination of fundamental strength and technical bullishness.
lead this group.
So are you up for the challenge? Can you pick the top 10 stocks from the Dow Jones Industrial Average? Will your picks outperform the
? Do you have what it takes to beat the SPDR Dow Jones Industrial Average ETF?
Put your stockpicking talent to work and
from the 30 stock components of the Dow Jones Industrial Average.
Be sure to
periodically to see if the community shares your stockpicking sentiments and, once voting closes, to see how the community portfolio performs. The selection deadline is June 18, 2010.
-- Reported by Kevin Baker in Jupiter, Fla.
Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.