Is buying all 30 Dow stocks a good idea for a long position?

I am thinking about longing all stocks in the Dow. Most have a pretty good dividend. I am planning on putting the Div back in and forgetting about it. I am tired of trading and just looking for a good long term investment. Say 10 years. I would still check the average weekly and change one or two if I thought that one had the chance of really going down. I was also thinking about buying all but three and exchanging the three I didn't like with better companies in the sector. What do you all think?

I did the math with my commission fees. It adds up to a total of 4% fees of the beging purchase price after all have been bought and sold on a 10,000 dollar investment. Why should I by a fund instead like DIA? Your money goes into paying the fund right? You don't get every penny of the dividend off of all those stocks do you?

Let's look at your math over a 30-year time horizon:

Assumptions:
$10k investment
$200 in commissions to buy all 30 stocks
$200 in commissions to sell all 30 stocks
7% per year average increase in dow
0.20% Expense ratio for exchange-traded fund
$7.00 to buy ETF
$7.00 to sell ETF

Results:
Buy and hold 30 stocks: $74,400.10 after 30 years
Buy and hold ETF: $71,910.32 after 30 years

Break-even point:
If invested 14 years or fewer, the ETF wins
If invested 15 years or more, buying individually wins

However, keep in mind that the ETF will keep your investment balanced, while buying and holding 30 stocks will not. So, for example, if GE kicks butt and GM tanks, the ETF will rebalance appropriate. On the other hand, you will be overinvested in GE and underinvested in GM.

Overall, I would go with the ETF. There is a good chance you will want to change your mind and sell in under 15 years, and you get the automatic rebalancing.

IYY is a decent dow jones tracking ETF.

-->Adam

This is actually pretty common practice. But before you go buying all those individual stocs, consider buying an "index fund." That's a mutual fund tied to the index (DOW, NASDAQ, ETC.) and they do all the leg work for you. You'd only pay one sales commission on that instead of 30.

Sure, if you have 300K to invest in domestic Large Cap as part of a mulit million dollar portfolio. Otherwise, the transaction costs for 30 individual stocks bought in relatively small amounts would be enourmous. Consider just buying DIA the closed end equivelent of the Dow, or for the very brave, DDM the Powershares Ultra Dow 30, designed to go up or down twice as much as the Dow.

no first you are spending way too much in fees 5-10 is a better fit ansd second you want to BEAT the market not eumlate it.