How IBM Influences the Dow

The following video is part of our "Motley Fool Conversations" series, in which senior technology analyst Eric Bleeker and consumer-goods editor and analyst Austin Smith discuss topics around the investing world.

Investors might not realize how skewed the Dow is toward certain components. Thanks to the Dow's price-weighted methodology, IBM has the highest weighting of any stock. Its price changes move the Dow almost double the next highest company. In fact, IBM is weighted in the Dow more than Microsoft, HP, Intel, Cisco, Verizon, and AT&T combined. That's more influential than all other tech and telecom stocks! To see Eric's analysis of what IBM's weighting means for investors and ways to broaden your exposure to other tech companies, check out the video.

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Austin Smith owns shares of Intel. Eric Bleeker owns shares of Cisco Systems. The Motley Fool owns shares of IBM, Intel, and Microsoft. Motley Fool newsletter services recommend Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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