2016 did not start well for markets around the world. Conditions were incredibly negative. Even the Dow Jones Industrial Average went down, causing many to be wary with new investments. However, before long the Dow again began to trade in the positive. Of course, this did not completely mitigate fears caused by the initial decline, and the Dow Jones Industrial Average has been somewhat volatile since.
Nonetheless, some stocks have remained sound investments throughout, and experts consider it a good time to buy in.
Let’s take a quick look at the reason for the Dow’s initial decline and its consequent rise. Then we can view these investments in context and review their potential.
Why did the Dow Jones Industrial Average decline?
The Dow is not the only market index that had a difficult start to the year. Its troubles were precipitated by two well-documented factors:
- China’s market crash. China has been blamed by most experts for the global market declines. The crash of the world’s second largest economy had an immediate impact around the world. Markets saw a 7% decline on the first trading day of 2016, fueling investor fear around the world.
- Oil prices. The cost of oil hit recent lows. The energy sector is very dependent on the price of oil, and thus has seen declines until its recent upturn.
Why has it recovered?
Since then, the Dow Jones has recovered somewhat. This is largely due to struggling economies’ steps to counter the crisis. With investor fear dropping, the markets have improved. Oil prices have also risen, leading markets closer to normalcy.
Positivity continues to grow, and with it certain investments. The following are some of the best stocks on the Dow Jones Industrial Average to invest in at the moment, according to analyst Jim Cramer:
General Electric (NYSE:GE): While its recent growth has stalled, this stock should rise with the oil price.
Johnson & Johnson (NYSE:JNJ): One to watch. Cramer considers it to be the best balance sheet in the world, with fantastic management.
MGM Resorts International (NYSE:MGM): The gaming and hospitality company has rallied 34% from lows reached in February. Much of this was due to a very solid last quarter, and there is potential for even more growth.
Zoe’s Kitchen (NYSE:ZOES): Positivity has been high. Cramer recommends buying aggressively.
American Tower (NYSE:AMT): Cell tower stocks have been on the up. This trend is expected to continue.
What to expect going forward
While the Dow Jones Industrial Average saw declines at the beginning of the year, along with the majority of world markets, its stocks have rallied lately. There are some with very high potential, and investors are positive.
If you're looking for sound investments, the Dow Jones is a pretty good place to start. The Dow Jones gains are expected to continue. Be careful with some of the low performing stocks, but even those that have stalled are looking good.
The markets are improving for investors, and traders’ interest is increasing too. Keep an eye on the Dow Jones Industrial Average. There’s great potential on the horizon.