Categories

Stocks

Tools

  • Economy & Politics
  • Investing
  • Personal Finance
  • Related Posts


    What Could Be Expected From Apple’s Q1 Earnings?
    Is A PepsiCo Spin Off Coming?
    Mario Gabelli’s Top Four Favorite Stock Picks
    Why Xerox Is A Strong Buy In 2015
    Welcome To The Wreckovery: Who Could Have Possibly Anticipated Caterpillar’s Disastrous Earnings And Guidance?
    How to Invest in the Next Alibaba — Before Its IPO
    Why Apple Is Growing Again
    Commodity Prices Hit Caterpillar Profit, Warns Low Oil Will Hurt ’15
    Lockheed Martin Revenue Beats As F-35 Fighter Jet Demand Rises
    Pfizer’s 2015 Forecast Disappoints, Crimped By Generics, Dollar
    P&G’s Quarterly Profit Falls 31 Percent
    Robinhood’s Free Stock-trading App, And Its Long Odds Of Survival
    Stocks: Between Dirt Cheap And Bloody Expensive
    Microsoft’s Moonshot And Apple’s Big IPhone Quarter
    Dogs Of The Dow Can Sniff Out Income


    The Dow Jones Industrial Average Is A Big Lie

    The Dow Jones Industrial Average is the most inaccurate and distorted of all stock indices – and yet it remains the most followed stock market index.

    Many of the Dow’s flaws are well-known, but that hasn’t stopped people who should know better from following its every move.

    There are plenty of reasons why the retail investor needs to take the Dow Jones Industrial Average with a grain of salt.

    Even the most basic aspects of the DJIA are flawed. When Charles Dow created the index in 1896, it consisted of 12 companies. In 1916 the number was increased to 20, and in 1928 increased again to 30, where it has remained.

    In both of those cases, and more than 50 times in the history of the Dow Jones Industrial Average, the component companies were changed. Such changes led to the creation of a clunky method to keep the index price consistent, the “Dow Divisor.”

    Click to read the full story

    Discuss this Story:

    Comment Policy: We encourage open discussion. Comments including racist statements, profanity, name calling or spam will be removed at our discretion. We use filters for spam protection. If your comment does not appear it is likely because it violates the policy.

    Index Fund Guru Jack Bogle: Don’t Over-invest In International Stocks
    Preview Of January FOMC Meeting And Beyond
    The Mystery Deepens: Dutch Central Bank Denies Reports It Bought Gold For The First Time In 17 Years
    Get Ready For (Fraudulent) Higher U.S. Interest Rates
    Why Oil Prices Will Be “Lower For Longer” In 3 Simple Charts
    Chinese Yuan Strengthens As Industrial Profits Plunge By Most On Record
    Stock Market Futures Eyeing Earnings From AAPL, CAT, And YHOO
    Double-Digit Healthcare Profits In 2015
    What Greek Election Results Mean For The Euro In 2015
    Stock Futures Slide With Microsoft, Caterpillar; Greek Worries Linger
    Mixed Earnings, Greek Jitters Fuel Market Caution
    Nelson Peltz Slashes Stake In Family Dollar
    Oil Price Recovers As Dollar Weakens Against Euro
    Apple Supplier Foxconn To Shrink Workforce As Sales Growth Stalls
    Mattel Removes CEO, Warns Of Fifth Straight Fall In Quarterly Sales
    Petrobras May Book $20 Billion Asset Write-down
    Is It Time To Return To Investing In Silver?
    Internet Television Has Arrived: Why Sling TV Marks The Beginning Of A New Era
    Tracking Juno: New York Prepares For One Of Top-5 Snow Storms In History; 50 Percent Of Flights Cancelled
    2015: The Year Of Default
    Oil Jumps On OPEC’s El-Badri’s ‘$200 A Barrel Sometime’ Comments
    Chinese Currency Plunges To Peg Limit Against U.S. Dollar, Strongest Against Euro In 14 Years
    About That ‘Strong Dollar’ — Corporatism Speaks
    Stock Market Volatility And What Its Return Means For The Global Financial System
    Four In 10 Of Us Are Experiencing ‘Extreme Gadget Obesity’
    Successful Investing Goes Beyond Index Funds
    Markets Move Lower On Greek Vote
    Feds Appeal Insider Trading Ruling
    Upcoming Earnings Reports To Watch This Week
    IBM Stock Is Taking Yet Another Hit
    Read more from Investing...

    Liberty Investor Digest

    Get today's most important
    financial headlines all in
    one place by email!



    Sources


    close[X]

    Sign Up For Liberty Investor Digest™!

    Get Liberty Investor Digest FREE By Email!

    Input your name and email address in the fields below and get today's most important financial headlines sent straight to you inbox!

    Privacy PolicyYou can opt-out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.