Stocktake: The Dow is past its sell-by date
The Dow Jones Industrial Average celebrated its 125th birthday last week. Some things pass the test of time, but this outdated index is not one of them.
Trillions of dollars are indexed to the S&P 500, but money managers ignore the Dow. This 30-stock index isnt representative of present-day corporate America theres no Amazon, no Google, no Facebook, no Berkshire Hathaway.
There were no computers 125 years ago, so it was easier to weight companies by share price rather than market capitalisation….
