The Dow Theory is an investment strategy that was found by the late Charles Dow that outlined certain natural movements in the stock market that can be advantageous for investor to know. The theory itself has three main factors that outline how the market moves according to investments made by the public. The movements that are typically made in the stock market, according to the Dow Theory are main movements, the medium swing and the short swing. These movements all take into consideration the market trends that are current at the time of the investment.
The main movements are the typical type of movements that occur in the stock market. These movements can include investment trends that last a short time or a long period of time. Some of the trends can be as little as a few months or they can be as long as many years. Many people invest in investments that are considered to be in the main movement. This is a common type of movement that takes place in the investment market. When the Dow Theory is considered, many people look at the main movement as the investments that many people are involved in making investments in the stock market.
The medium swing is considered to be movements that are made according to how the stock market performs. These can be considered a response to the market itself and how it performs. These movements have been thought to last from days to a few months, according to the Dow Theory. The short swing movements are considered to be short term movements that can last for hours to days. These movements occur on a daily basis in the stock market, and the movements are characterized as being relatively short in duration.
There are many investors who believe in the Dow Theory, although it has not been a scientifically proven way for investors to invest in the stock market. It has been found that the Dow Theory can sometimes produce returns when a diverse portfolio is place for the investor. This spreads the returns or losses among many different industries and investments, which can lessen the financial blow if a major loss is to occur. Whenever the risk is lower for an investment, this usually means that the return is lower as well. The Dow Theory was analytical papers that were created by Charles Dow, which at the time he was alive were not called a theory.