A very simple question

R

Rehoboth

If you were to pick any point in time in the past 100 years and short the stocks of the dow and go long the dow(via futures or whatever); how would this strat fair over the course of 10, 30 or 50 years? So you would never adjust the stocks you are short.
 
well you would have to pay dividends on all the stocks you are short while not getting any dividends in your long index fund, for this reason alone this strat would be a huge loser over time.
 
I think what he's getting at (correct me if I'm wrong) is that the names on the Dow are switched out from time to time, that Dow companies have actually gone out of business.

This is one of the things I don't like about people promoting "buy and hold" using index funds. They aren't truly buy and hold anyway. They're managed, too, whether the die-hard people promoting this method want to admit it or not.
 
Quote from seauouch:

well you would have to pay dividends on all the stocks you are short while not getting any dividends in your long index fund, for this reason alone this strat would be a huge loser over time.
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Where is this strange land in which you dwell in which index funds do not collect dividends on their stocks?
 
Quote from Susannah:

I think what he's getting at (correct me if I'm wrong) is that the names on the Dow are switched out from time to time, that Dow companies have actually gone out of business.

This is one of the things I don't like about people promoting "buy and hold" using index funds. They aren't truly buy and hold anyway. They're managed, too, whether the die-hard people promoting this method want to admit it or not.
More...


Yes this is what I was getting at. But I guess I want to know is how the stocks of the DOW of lets say 1978 is preforming compared to the DOW index of 1978.
 
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