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Remember when the Bee Gees’ Stayin’ Alive was the biggest hit on the radio? If so, you were the last time the Dow Jones Industrial Average had a nine-day losing streak, which was reached on Tuesday.
The only exchange-traded fund that tracks the oldest stock market benchmark, the SPDR Dow Jones Industrial Average ETF (DIA)fell another 2.6% on Wednesday on inflation worries, extending the index’s longest stretch of consecutive losses since 1978.
Several factors contributed to the decline in December.
In the immediate rear view is a great post-election race. For the month ending Dec. 5, the start of the Dow’s nearly 47-year losing streak, DIA rose nearly 7%. That strong short-term performance, which accounts for nearly a third of gains for the entire year to date, may seem overblown to many investors who tend to lock in gains by selling stocks ahead of an uncertain new year.
The Fed’s revised summary of economic projections, or dot chart, now forecasts two rate cuts next year, down from three expected in September, while inflation estimates were adjusted higher.
Looking ahead, in addition to the Fed’s slower rate policy projections, the incoming Trump administration’s policies, including potential tax and tariff cuts, have heightened inflation concerns.
The Dow Jones Industrial Average (DJIA) is a stock market index that tracks the performance of 30 large publicly traded companies in the United States. These companies span a variety of industries, excluding transportation and utilities, providing a snapshot of the overall health of the US economy.
Unlike other indexes, the DJIA is price-weighted, meaning companies with higher stock prices have a greater influence on index movements. It is often used as a benchmark for market performance and investor sentiment.
The DIA ETF is designed to mirror the performance of the DJIA. By buying shares of DIA, investors effectively own a portfolio representing all 30 stocks of the DJIA. This allows investors to gain exposure to the overall performance of the DJIA without having to buy each individual stock.
DIA is structured to provide liquidity and ease of trading, making it a popular choice for both long-term investors and short-term traders. In addition, the DIA ETF pays dividends, as it passes through the dividend income of the stocks it owns. This makes it an efficient way for investors to participate in the performance of the Dow while benefiting from its income potential.
