The DJIA is a dinosaur and irrelevant. Its price-weighted because that was easier to calculate than a market-cap weighted fund when the thing was created ~140 years ago. Which means that high dollar value stocks have more weight in the index which doesn't really make sense.
But worse, how we talk about the index, even today on radio and TV, in terms of nominal points up or down is completely ridiculous. Just yesterday "the Dow Jones was up 100 points". Ok - no reference value, no percentage change: means nothing to me. And we wonder why we are financially illiterate in this country.
But worse, how we talk about the index, even today on radio and TV, in terms of nominal points up or down is completely ridiculous. Just yesterday "the Dow Jones was up 100 points". Ok - no reference value, no percentage change: means nothing to me. And we wonder why we are financially illiterate in this country.