4 ms·
The Dow is a pretty bad index -- It's just one of the older ones. It's literally adding up the prices of 30 stocks and dividing by a divisor that's been adjust
by wiredfool 7y ago
The Dow is a pretty bad index -- It's just one of the older ones.
It's literally adding up the prices of 30 stocks and dividing by a divisor that's been adjusted over time as stocks are added and removed from the index. It was easy to calculate early on, and it's continued because it's famous.
- mattmcknight 7y agoWouldn't the exiting and entering of companies have a negative effect on the index holder over time (as they are selling the exiting companies when they are valued low and buying the entering companies when they are valued high)?