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muriel_volestrangler

(106,037 posts)

5. Lesson 1: The Dow Jones is not the most representative index of "the stock market"

Sat Feb 7, 2026, 05:13 AM

Feb 7

It's an oddly-constructed relic from pre-computer times, that uses only 30 selected companies, with an odd weighting that no-one can really justify in the present. It's reported in the news because it's been reported for many decades. Ignore it.

The S&P 500 is the 500 largest US stock market companies, weighted by their market capitalization. This makes sense. This is what investors use as a benchmark, or in index trackers (there are indices for smaller companies, the tech-heavy NASDAQ, and if you look really hard, you may find something tracking the Dow Jones, but the S&P 500 is by far the one most tracked and studied).

That did not reach a high today - down a little from what had been an all-time high on Monday.

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I am completely flummoxed by the stock market - and in particular today's giddy highes [View all] stopdiggin Feb 6 OP

Talking heads have attributed it to heavy investment in AI. Without that, they say that the rest of the spooky3 Feb 6 #1

AI bubble Fiendish Thingy Feb 7 #2

I don't know anything about how the stock market works but I will agree with those that say Marie Marie Feb 7 #3

I was prepared for a meh day to finish the week... Mark.b2 Feb 7 #4

Lesson 1: The Dow Jones is not the most representative index of "the stock market" muriel_volestrangler Feb 7 #5

It's a game I haven't played in almost two decades, mostly a spectator sport for me DFW Feb 7 #6