Categories

Stocks

Tools

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


    How Hewlett-Packard Plans To Split In Two
    Seven Alluring Stocks Tempt Investors Into Peril
    Four Things Investors Should Know For July
    Teladoc Shares Surge 50% In Healthy IPO Debut
    PayPal To Buy Digital Money Transfer Provider Xoom
    Obama Trade Bill Would Boost Biotech Patents, Leak Suggests
    Sony’s Hubris Causes Stock Market Bloodbath
    Constellation Brands Profit Buoyed By Beer Sales
    This Will Make Small-Cap Investors Look Very Smart
    What Wall Street Doesn’t Get About Plug Power… Yet
    ACE To Acquire Chubb In $28.3 Billion Deal
    Five ‘Firecracker Stocks’ Light It Up In July
    Dow Rises, Ends Q2 1.1% In The Red For 2015
    Six Stocks Crank Out 417 Percent Gain In Six Months
    Petrobras History Of Failed Plans Raises Doubt Over New Promises


    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.

    GOLD: Will This Summer’s Rally Mark A Cyclical Turning Point?
    The “Smartest Money” Is Liquidating Stocks At A Record Pace: “Selling Everything That’s Not Bolted Down”
    Whole Foods Apologizes For Overcharging Customers
    Donald Trump’s Three Biggest Leadership Mistakes
    Is Xiaomi Running Out Of Steam?
    There’s A Ticking Time Bomb Inside The Online Advertising Market
    Insurance Acquisition: Centene Buying Health Net
    Apple Watch Sales Lagging
    Nike And Neymar Might Have Just Shown Us The Future Of Virtual Reality
    An American Giant Robot Just Challenged A Japanese Giant Robot To A Duel
    U.S. Futures Rise Ahead Of Jobs Data
    Dixons Carphone In Deal With Sprint To Open U.S. Stores
    Dollar Firms Before Payrolls, Greece Unease Simmers
    Chinese Stocks Tumble Again, Ignoring Beijing’s Blandishments
    ArcelorMittal Mexico Unit To Slash 2,800 Jobs
    Macy’s Cuts Ties With Trump, New York City Reviews Contracts
    U.S. Probing Whether Airlines Collude To Keep Airfares High
    Former U.S. Agent Pleads Guilty To Bitcoin Theft In Silk Road Probe
    U.S. Sues To Stop Electrolux Acquiring GE’s Appliance Business
    Why Elon Musk Is Donating Millions To Make Artificial Intelligence Safer
    Gold Shrugs Off Armageddon
    SpaceX Won’t Give Up
    France Is Right To Mistrust Uber
    Gold Dips As Greek Hopes, Upbeat ADP Report Weigh
    SEC Still At A Loss Over How To Fix ‘Broken Market’
    Dollar Rally Set To Resume In 2nd Half Of 2015
    The Real Bitcoin Price-Greek Debt Crisis Connection
    What Is A Leap Second And Why Does It Matter To The Stock Market?
    What Is Google Fiber?
    Puerto Rico Crisis: Funds With Most To Lose
    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.