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It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all A
by unreal37 7y ago
It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all American companies. But it's used as the primary indicator of the health of American companies in nightly news reports.
"Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity."
A lot of people just wish the DJIA 30 would disappear from popular use. It's a harmful metric that gives the illusion of prosperity.
- briandear 7y agoThe Russel and S&P are generally right next to the Dow in financial news. There is value in each of those indexes if you know what you are evaluating. The health of large companies does reflect the health of the overall economy for the most part. Combining that with the S&P gives a pretty good measure of the US economy.
- lonelappde 7y agoThe only people who don't like the DJIA are nerds who are annoyed that such a simple model works so well at approximating the whole market: https://www.marketwatch.com/investing/fund/vtsax/charts https://www.marketwatch.com/investing/fund/vtsax/charts