Is The DJIA A Defective Indicator? by Max Bader, M.D., M.P.H.
ARTICLE SYNOPSIS ...Is The DJIA A Defective Indicator? by Max Bader, M.D., M.P.H.
The Dow Jones Industrial Average (DJIA) is the most popular and commonly quoted of the stock market averages used to measure market activity. This is due mainly to its long history as a market measurement index rather than to other strengths. Today's DJIA differs considerably from that of previous years, a fact not generally recognized by its adherents. Currently, the DJIA is composed of 30 large-capitalization stocks initially selected to represent the major components of U.S. business.
Together, their sales represent about 20% o...