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Big Blue's Big Day Lifts the Dow

Big Blue's Big Day Lifts the Dow

International Business Machines (IBM) enjoyed a rare post-earnings celebration on Wednesday that led the Dow to a rebound from Tuesday's losses. IBM, whose stock had suffered next-day declines after 16 of its past 20 quarterly reports, rocketed ahead by 8.5% following a fourth-quarter report released late Tuesday that included better-than-expected profits and guidance for 2019. Fellow Dow component Procter & Gamble (PG) helped the cause with a 4.9% gain triggered by its own earnings beat and strong organic sales growth in China. The industrial average finished the session up 0.7% to 24,575.

Macroeconomic headlines still are steering the larger ship, though investors seem ready to pounce on quarterly earnings reports -- for better or worse. That likely means short bursts of volatility for even the biggest of blue-chip names. The key to digesting any company-specific news, whether it's quarterly earnings, mergers or business initiatives, is to focus on how (or even whether) the headlines change the long-term trajectory of your holdings. Think decades, not just years. That's why low-fee, high-quality index funds are a good choice for some stock exposure; they keep you from making knee-jerk reactions to every last headline. That's also why the Dogs of the Dow is such a winning tactic. The strategy takes advantage of shorter-term troubles to get great prices on blue chips that typically still have solid prospects ahead. Buy-and-hold really is a terrific approach, but it takes a special kind of stock with wide moats, bulletproof financials and crafty leadership. These 11 picks have what it takes to hold up -- not just for this year or next, but for the next decade.

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