I Don't Blame Dow Jones: I'd Trade Out Raytheon Tech for Honeywell Too
The Dow Jones Industrial Average (DJINDICES: ^DJI) is getting its biggest shakeup in seven years, announcing a trio of moves including swapping out aerospace specialist Raytheon Technologies (NYSE: RTX) with the more diversified Honeywell International (NYSE: HON).
Despite the glib headline, the committee behind the moves is not offering investing advice. In a statement, S&P Dow Jones Indices, which runs the index, said the moves were prompted by Apple's pending stock split and by a desire to "diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy."
Nevertheless, many people will buy and sell these stocks based on the news, and index funds that track the Dow index will be forced to buy the new additions and sell the companies leaving the index. Whether it's in the index or not, here's why investors are right to prefer Honeywell to Raytheon right now.
Source Fool.com
