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Econometer talks changes in Dow Jones

Roger Showley, U-T SAN DIEGO

Friday, September 13, 2013

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Kelly Cunningham, National University System 
Answer: YES

The economy is impossibly complicated. Even sophisticated attempts to summarize its health and evolution inevitably oversimplify it. The DJIA is limited to 30 significant publicly traded companies, not weighted by size or importance, but only total per-share prices. Companies are interchanged in an attempt to maintain relevancy with current industrial trends, although consistency over time is lost. The index is symbolic, however, of economic sectors ebb and flow. Newly included companies sell services or add value through diverse applications of creative talents reflecting how much the contemporary economy is driven by creative thinking and imagining new ways for doing things.