The Purpose of the Dow

There are two great mysteries in this world: the secret of the fox, and the purpose of the Dow Jones Industrial Average (DJINDICES: ^DJI  ) .

OK, so we figured out what the fox actually says ages ago, but have you ever stopped to consider what the Dow is meant to do? Spoiler alert: It's not designed to mirror the American stock market. The index is also not looking for the most attractive investment opportunities, or else ExxonMobil (NYSE: XOM  ) and AT&T (NYSE: T  ) might have been dropped from the Dow already.

In the video below, Fool analyst Anders Bylund mercifully avoids singing about the mysterious fox. Instead, he's explaining what the Dow really was designed to do and how astute investors can use it as a research resource.

Is this big bank simply too good for the Dow?
Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." And you know what? It's actually not a Dow Jones component, nor has it ever been! You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2773642, ~/Articles/ArticleHandler.aspx, 11/26/2014 10:08:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement