• There are certain trading strategies which may help you invest in the Dow.stock market analysis screenshot image by .shock from Fotolia.com
  
  The Dow Jones Industrial Average is one of the stock market indicators that show how the largest publicly owned companies have traded during a session in the stock market. The Dow is a reliable gauge for how well the American industrial economy is doing in connection with economic reports and domestic and foreign events. Trading on the Dow is never a sure thing, but there are several strategies you can follow that may help your stock picking.
  
  

Dogs of the Dow

• This trading strategy was created by author Michael O’Higgins to help investors re-balance a portfolio in a short period of time. Look at the 30 stocks that make up the Dow and examine their dividend yields. Invest equal money in the 10 stocks that have the highest dividend yield indicators. Wait one year and look at the Dow again. Sell the stocks that are no longer in the Dow and replace them with those that are now in the top 10 of the Dow. Always hold onto these stocks for at least one year to attempt to receive long-term capital gain (Reference 1).
  
  

Foolish Four

• The Foolish Four trading strategy was created by the Motley Fool company and spelled out in its The Motley Fool Investment Guide. The strategy still requires you to determine the top 10 Dow stocks in relation to dividend yields. Once you have determined those 10, rank them in order of least expensive to most expensive. Invest 40 percent of your investment portfolio in the second-lowest priced and then 20 percent each in the third-, fourth- and fifth-lowest priced. While this strategy is more volatile than investing in the Dow itself or in a broader index, you may receive higher returns than either of them will provide (Reference 2).
  
  

Top-Down

• The top-down trading strategy can determine whether or not it is a good idea to trade at all, let alone which shares you should be trading. This strategy is like looking down at all of the stocks in the Dow with a bird’s-eye view in which you determine where the cash is moving, and if it is staying in the United States or not. Look at a chart of the Dow over the course of 10 years or so and see if the prices are going up or down in the last year in relation to the trend of the chart. This analysis will help you determine if you want to be in the market for a short period, long period or indeed in the market at all. The opposite of this method is the bottom-up method in which you determine securities that are doing well of late and invest in them (Reference 3).