4 ms·
It's too bad this analysis was done against the Dow Jones Industrial Average which is a price weighted index of only 30 large cap stocks and widely considered t
by asaph 7y ago
It's too bad this analysis was done against the Dow Jones Industrial Average which is a price weighted index of only 30 large cap stocks and widely considered to be a poor indicator. Something like the S&P 500 index would would have been a better choice though it doesn't go as far back as the DJIA.
- computerphage 7y agoAlthough, the Dow doesn't really go back that far either in the sense that it swaps out stocks occasionally, which could cause spurious conclusions to be drawn if not accounted for.
- kgwgk 7y agoThe S&P 500 does also swap stocks, and more often :-)
- kenneth 7y agoIf the data exists for the underlying stocks in the market, a far better indicator would be to do an IRR calculation on every stock in the market, or every stock above a certain market cap threshold (inflation-adjusted). Easy enough.
- tutfbhuf 7y ago"though it doesn't go as far back as the DJIA" That's not a big of a deal, it has been calculated backwards using historical data.