Which Index Is King???

This week’s edition of the Intelligent Investor addresses upcoming changes in the Dow Jones Industrial Averaged and its performance record vs. the S&P 500. The Dow is set to swap the current components Alcoa, Hewlett-Packard and Bank of America for Nike, Visa and Goldman Sachs Group. These changes were prompted by low prices of the components being replaced and a desire to diversify the index. Critics of the Dow point out that it is a price weighted index and the S&P 500 is a value we...