Buffett ApprenticeIYY: Walking with the Dow Jones
In the past, the Dow Jones Industrial Average, S&P 500, and NASDAQ have undoubtedly been the indices that could maintain continuous growth.
Looking back at this bull market in U.S. stocks, it was actually the result of multiple overlapping factors.
First, since the 2008 financial crisis, global QE policies and the Federal Reserve's massive liquidity injections have continuously increased market liquidity. As the most obvious beneficiary of globalization, the U.S. stock market has rightfully become a reservoir for capital.
Next was the rise of mobile internet, with companies like Apple, Amazon, and Meta demonstrating strong vitality and competitiveness.
Amid the global internet wave, more and more industries have been transformed. As the leader and engine of the internet, U.S. stocks have enjoyed the most market dividends.
Originally, the new round of growth was nearing its limit around 2018. However, the massive liquidity injections due to the pandemic once again released enormous liquidity until the U.S. interest rate hike cycle began in 2022.
Originally, U.S. interest rate hikes, including pressure on Treasury yields, would have some impact on U.S. stocks, especially the market shock caused by the Silicon Valley Bank collapse in early 2023, which somewhat affected market confidence.
However, through the joint efforts of the Federal Reserve and the Treasury, this risk was mitigated. Meanwhile, AI is likely to become the new breakout point of the fourth technological revolution, reshaping industries.
As one of the most representative indices of U.S. stocks, IYY closely follows the movements of the Dow Jones, sharing the same fate as the market.
The top ten holdings of the product basically cover the leading companies in the U.S. tech industry. It can be said that these companies can influence the direction of the global economy.
However, judging from IYY's trend, the journey has not been smooth sailing.
Around 2023, the market was divided on the outlook for the U.S. and global economies. News of massive layoffs at major companies like Apple, Microsoft, Google, and Oracle affected market judgments about future prospects.
However, this test of confidence did not last long. In the last quarter of 2023, benefiting from improving U.S. employment, CPI, and other data, expectations for Federal Reserve rate cuts also increased. Even though the Fed has not yet cut rates, optimism has spread to every corner of the market.
Therefore, in the long run, IYY, which progresses alongside the Dow Jones, will maintain a positive trend.$iShares Dow Jones US(IYY.US)
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