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Dow Picked Goldman Sachs, but Investors Should Pass

Tickers in this article: AA BAC DJIA GS HP NKE V
NEW YORK (TheStreet) -- Recently the Dow Jones Industrial Average removed three stocks from its membership roster and added three new stocks in their place. The stocks that were kicked out: Alcoa , Bank of America and Hewlett-Packard . The stocks added: Visa , Nike and Goldman Sachs .

I wrote about this change in another publication and why, in my opinion, it took so long for Visa to be added. I also analyzed the worthiness of Visa as a Dow member. Ultimately, what I determined is that Visa is a great stock that is worthy of the Dow, and its membership has been a long time in the making.

But what about Goldman Sachs? Why was it finally chosen as a DJIA member and is it actually worthy?

Data from Best Stocks Now App

Goldman Sachs has been around a long time -- since 1869 -- which leads back to my question: Why now, Dow Jones?

Headquartered in New York City with offices in major financial cities across the world, GS is a global investment banking and management and securities firm that provides a varied range of financial services to the likes of corporations, financial institutions and governments, as well as high-net-worth individuals.

GS falls into the financial sector of the market. So far in 2013, the financial sector has had pretty mediocre performance. In fact, currently, I give the financial sector a grade of B-.

Data from Best Stocks Now App

GS is a $75 billion company. It is a large-cap stock. Large-cap stocks also have had pretty mediocre performance in 2013. Currently, the large-cap stock asset class gets a grade of B.

Data from Best Stocks Now App

GS is a stock geared toward conservative risk-profile investors.