Comments on: What Is The Dow?

By: ffb

ffb — Mon, 20 Oct 2008 20:45:55 +0000

@ Joe – Amazes me too how the 30 are the norm!

@ ABC’s – Ouch! It will go back up (won’t it?).

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I Cut the Cable PrimeTime QuickHits | Prime Time Money — Sat, 18 Oct 2008 21:47:27 +0000

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By: ABCs of Investing

ABCs of Investing — Sat, 18 Oct 2008 01:57:33 +0000

Good stuff! I guess it could be renamed the “Down”?

Mike

By: Joe

Joe — Fri, 17 Oct 2008 21:00:15 +0000

A timely post indeed FFB!

I also favor the S&P 500, but it is amazing how 30 stocks can overwhelm an investors psyche.

By: ffb

ffb — Fri, 17 Oct 2008 20:09:16 +0000

@ Russ – It is pretty amazing that 30 companies are the usual representation of the market. I tend to look at the S&P (though still only 500 companies).

@ JMom – That’s funny. I had a comment on another post about a child asking a question and going to Google. Wow. When I grew up we had to use an encyclopedia. Amazing how things have changed!

By: JMom

JMom — Fri, 17 Oct 2008 16:59:18 +0000

My daughters asked me this question the other day and I told them to go ask Google. LOL!

Thanks for the explanation. I won’t look like such an idiot next time I get asked.

By: Russ

Russ — Fri, 17 Oct 2008 14:26:15 +0000

Nice post. And I think you indirectly highlight a very important point . . .

The Dow is often considered “the market”. Typically, when someone says what did “the market” do today, they’re referring to the Dow.

But the Dow is by no means a fair representation of the actual US Stock Market. It continually amazes me that an index of 30 stocks can be equated with the broader market which is comprised of thousands of companies of all sizes.

Granted, the Wilshire 5000 (total market index) and the Dow 30 typically move in the same direction most of the time, the degree of their correlation is often much less than 1.

Thanks again for your post.

By: Personal Finance Buzz

Personal Finance Buzz — Fri, 17 Oct 2008 14:16:29 +0000

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