Better Buy: Cisco or All 30 Dow Jones Stocks?
It's tempting to be sure. With Thursday's sell-off in response to weak revenue guidance for the quarter now underway, Cisco Systems (NASDAQ: CSCO) shares are now down more than 30% for the year. Yes, the company says it's running into a headwind, but the stock's pullback arguably already reflects this. Cisco may also be sandbagging expectations, just so it knows it won't fall short of estimates when it posts fiscal fourth-quarter results three months from now. This is still Cisco, after all. Supply chain problems or not, it's a premier name within the networking arena.
Before you dive into this beaten-down Dow Jones Industrial Average (DJINDICES: ^DJI) stock, though, there's an alternative worth considering.
It's the age-old question that never really gets answered: Do I risk betting all my available, idle cash on one stock that might pay off in a big way? Or do I hedge my bet and buy a basket of stocks, limiting my downside but also limiting my upside? In this case the single stock is obviously Cisco, while the alternative basket would be a fund like the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA), which includes Cisco as one of its 30 holdings.
Source Fool.com
