With earnings season largely finished, now can be a good time to reevaluate positions within your portfolio to ensure they remain fit for investment/find replacement options for unactionable names. Positive results can confirm recent price movement, giving opportunities to exit technically weak names and add to technically strong ones. With that in mind, we will take today’s report as an opportunity to do a “Dow Dissection”, looking underneath the hood of .DJIA to diagnose the good, bad and ugly of the index as we travel through August. To start at a high level, we can utilize a 5% price matrix (dividends excluded) to create a relative strength matchup between constituents. The top half of those rankings is included below.

The Good: Traditional Financials, Some Technology

Financials have earned a spot within the top three of the DALI sector rankings since last May (in the top half since December 2023.) Lots of this strength has come from the larger names within the sector, names which kicked off earnings season earlier in July. Results were largely mixed as markets kept a watchful eye over net interest income... some names consolidated. JPM is a prime example as it has seemed to have run into some overhead resistance around those all time highs from later in July. Despite this, the name remains a strong 5/5’er with support just above the middle of its respective trading band. With that said, its current levels provide a strong entry point, assuming the name still passes your fundamental screens post earnings. Other strong technical pictures are seen from NVDA, GS, AXP, AMZN and a handful of representatives from the top of the matrix. Remember, building out a “complete” picture is most important, using both absolute and relative viewpoints to do so.

The Bad: Staples, Some Technology

Risk-on areas of the market remain firmly in control of upside action as we move through the back half of the year. With that said, several points of relative weakness come from the consumer staples sector. The likes of Procter & Gamble (PG) & McDonald’s (MCD) are two main names that come to mind that saw notable downside action over the last month, suggesting those with exposure should remain on guard for bounces to trim/cut exposure. On the technology front, the sector continues to be largely narrow in its upside action. With that said, there are a handful of names within the sector that present poor technical posturing at the time of this writing. Salesforce CRM has been ushered lower by its negative trend line and remains a point to avoid within the Dow.

The Ugly: UnitedHealth Group (UNH)

It may come as no surprise that UNH remains at the bottom of the Dow matrix after the stock has shed roughly 50% this year. The 0/5’er is in a class of its own, not earning a single buy signal (or column of X’s for that matter) at the time of this writing. Holders should continue to trim, and near-term traders should look elsewhere when identifying opportunities.

During times of volatility, being able to hold clients’ hands is one of the most crucial aspects of being an advisor. Everyone loves to make money, but nobody likes the risks associated with it. This year has been no stranger to sharp movement, with the S&P 500 (SPX) falling as much as 11.5% just in the week following liberation day. That one-week move was worse than 99.8% of weeks, placing us in highly abnormal territory that caused panic among many investors. In these situations, it’s important that clients don’t lose sight of the bigger picture. Despite the market uncertainty at that time, the dip may not have meaningfully changed many clients' ability to meet future goals. Uncertainty is inherent in investing, but by understanding the range of possible outcomes, we can do a better job navigating investors through that uncertainty.

While history may not repeat itself, it often rhymes, which means it can serve as a guide during times of uncertainty. To help contextualize what to expect, we looked at the total return of the S&P 500 since 1950 depending on an investor’s time horizon. Oftentimes, investors have a target return needed by a certain point. The table below shows the probability of exceeding a return objective depending on the amount of time invested in the S&P 500. For example, an investor can expect a 75% chance of doubling their money or more after 10 years while there is a 97% chance that the S&P 500 is positive. Looking further out, there would be a 100% historical chance that an investor would at least double their money over a 20 year span.

To further contextualize things, the second table below gives the range of returns one can expect at different time horizons. Time in the market is by far the most important factor for performance given the increase in potential upside and decrease in downside after the first two years. The potential for upside over long horizons is magnified by the compounding of returns. Holding the market averaged a median 10-year gain of 186% while those able to hold on for 30 years saw a median gain ten times that of 1985%.

Another benefit of the longer horizon is the reduction in downside. Investors who bought the S&P 500 for any 5-year period since 1950 would have seen a maximum loss of -34.8%. Meanwhile, the minimum return for 15-year investors was positive 66%, highlighting the luxury that time offers. The cyclical nature of the market means that periods of downturn are more likely to be followed by bull markets, and vice versa. Those fluctuations cancel out enough to narrow the spread of returns over time.

The narrowing of outcomes can be visualized by looking at the S&P 500’s range of annualized returns depending on the time horizon. Over short periods, the range of annualized returns is extremely large, with the difference between the 90th and 10th percentile one-year returns being 42.5%. Meanwhile, 30-year periods only have a 2.9% difference in annualized returns between the 90th and 10th percentile outcomes. In general, the more time one spends invested in the market, the less their portfolio will deviate from expectations. Similar to the previous tables, the 15-year mark is when returns have historically always been positive, as the minimum annualized return was 3.43%. Some portfolio losses are an inevitability for investors, but time heals all for those able to hold on long enough.

One point to note is that every market environment is different, meaning that these ranges and probabilities may not always hold true. Prior to 2020, the S&P 500 had never lost more than 30% in a full month’s length, but those invested in early March 2020 were in for a rude awakening after losing 34% within a month. However, previous environments can at least give an indication as to whether investors are on track to meet their future financial goals. And when it comes to achieving financial goals, nothing is more valuable than the time spent invested.

Daily Option Ideas for August 11, 2025