Getting Kicked Out of the Dow Is Actually a Buy Signal
History shows Dow removals often mark a bottom. Verizon's exit could be your next trade setup.
Wall Street loves a good curse, and the so-called "Dow curse" might be the most profitable one you've never traded. When a stock gets booted from the Dow Jones Industrial Average, the gut reaction is to sell. That's exactly the wrong move.
The logic is counterintuitive but battle-tested. Index funds dump the removed stock mechanically, creating forced selling that has nothing to do with the company's actual fundamentals. That artificial pressure creates a discount — and discounts are where trades are born.
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Right now, the curse is pointing squarely at Verizon. The telecom giant was recently shown the door by the Dow, making way for a higher-profile name. If the historical pattern holds, that rejection could be the setup savvy traders have been waiting for. Meanwhile, Alphabet — the stock coming in — often faces the opposite dynamic: index-driven buying inflates the price right as everyone's most excited about it.
Think about it this way. The Dow is a prestige index, not a performance index. Getting added means you've already won. Getting removed means the narrative has soured — but narratives change, and prices adjust faster than stories do. Stocks like Salesforce, Walgreens, and others have traced this same arc after their own Dow divorces.
The trade idea is simple: watch the forced selling exhaust itself, check whether the underlying business still generates real cash flow, and consider whether the sentiment washout has gone too far. That's the Dow curse in reverse — and it's been working for decades. Continue reading at MarketWatch.com
