Is the Dow 30 still just a collection of American industrial corporations? Is it a reasonable estimate of the health of the broader economy? James K. Glassman has the answers.
"Even stranger is how the Dow is calculated. Most indexes, including the Standard & Poor’s 500, are weighted by market cap: Bigger companies affect the index’s value more than smaller ones. But the Dow is weighted by stock price — an arbitrary figure that has little to do with size or value."
--Glassman, Five Myths about the Dow (Washington Post)
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