Does anybody even know how the Dow is calculated? It has something to do with 30 particular stocks if I remember correctly. I’m sure those stocks are SUPPOSED to reflect the spectrum of the economy but I’m skeptical.
The problem with DOW is that the 30 stocks are changing all the time. The list of 30 when I began trading stocks in 1963 is completely different than now.
And it is not a simple average price of 30 stocks! There are different factors assigned to each of the 30 stocks in computing the DJI number.
If you keep throwing out poorly performing companies and adding currently better performing companies, DOW Jones Industrial (DJI) average looks better than reality.