Critics argue the Dow no longer reflects the modern economy

The Dow Jones Industrial Average vs. the S&P 500: Which one is a better representation of the economy?

The Dow and S&P 500 are both indexes meant to provide a broad representation of the economy. The Dow has 30 companies and is weighted by share price, while the S&P 500 has 500 different companies weighted by market capitalization. Since the indexes are so different, investors don't always agree on which index is a better representation of the economy—though the two move in the same direction more than 90% of the time.

The Dow’s price-weighted formula makes stock price matter more than size

Unlike most indices, which weigh companies by market value, the DJIA is price-weighted—meaning higher-priced stocks have more influence on its movements. As a result, a company’s share price matters more than its overall size.

The Dow now tracks 30 major US companies across various industries

Since 1928, the DJIA has included 30 firms. Today's group spans technology, healthcare, and finance—with Apple, Microsoft, JPMorgan Chase, Pfizer, and Coca-Cola among its most recognized components.

The Dow remains a shorthand for America’s economic health

For over a century, the Dow Jones Industrial Average has been one of the most closely watched market barometers. Its rises and falls dominate headlines and politics, shaping how Americans perceive the strength of their economy.

Dow components are chosen by a committee, not a formula

Unlike many indices, the Dow has no strict rules for inclusion. A small committee at S&P Dow Jones Indices uses judgment—favoring companies with strong reputations, steady growth, and broad investor interest.

The Dow Divisor keeps the index consistent through time

To adjust for stock splits, mergers, and replacements, the DJIA uses a figure called the Dow Divisor. Originally valued around 12 in 1896, and now less than one, it ensures today’s index levels remain comparable with the past.

The Dow Jones Industrial Average was created in 1896

Charles Dow introduced the DJIA on May 26, 1896, as a simple average of 12 industrial stocks. Although it became the nation’s most enduring market index, none of its original companies remain in the Dow today.

In late 2025, the top 10 companies in the S&P 500 made up more than 40% of the index's total value

This raised concerns for investors about the index's risk exposure. As many large tech companies continued posting record highs, analysts argued that the top-heavy index was becoming less representative of the economy as a whole.

GE’s removal marked the end of an era for the Dow

General Electric, the last surviving original Dow component, was dropped in 2018, after years of decline. Its exit symbolized the fading dominance of industrial giants and the index’s shift toward technology and healthcare.

Dow Theory laid the groundwork for modern market analysis

Developed by Charles Dow in the late 19th century, Dow Theory argued that markets move in trends. Its principles—confirmation, trends and volume—still influence technical analysis today.

Ray Dalio argues that American capitalism is broken, citing economic factors like a growing wealth divide

Dalio also points to stalling income growth, weak healthcare systems, and poor educational outcomes when arguing that American capitalism needs serious reform. However, critics point out that Dalio has amassed a large fortune by running the world's largest hedge fund and question whether Dalio really wants economic reform.

Relive the biggest swings in the Dow’s history

From the 1929 crash to the Coronavirus Pandemic in 2020, this piece spotlights five of the most dramatic single-day moves in the Dow’s 125-year history.

Some critics say comparing chart rankings across decades is meaningless

Although Billboard’s charts are presented as objective measures of a given song’s popularity, the company’s changing methodology (alongside changes in technology and listener habits) has made weighing chart success from different eras an imperfect science.

Critics say that the Electoral College is outdated and favors small states

This article argues that the Electoral College no longer reflects modern democratic norms, disproportionately advantages smaller states, and warrants broader reform and national debate. (Some readers may experience a paywall.)

The number of publicly traded companies has decreased in recent years

In 1996, more than 7,300 companies traded publicly on US stock markets, but that number has recently dropped to 4,300. Economists point to two reasons: First, going public requires full disclosure of operations, exposing it to scrutiny from investors, competitors, and analysts. Second, the IPO process is expensive and time-consuming.

Read about the 'gatekeeper' of the stock market, former index chair at S&P Global

David Blitzer, the former index chair at S&P Global, earned the nickname "gatekeeper" of the stock market after helping decide which companies made it into the S&P 500 for 24 years. Blitzer became a legend in the world of indexing and has a reputation for being even-tempered and always wearing a bow tie.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

Arguments for returning to a gold standard reappear from time to time

However, critics argue that globalization has made the gold standard impractical for modern economies, as it limits a nation’s ability to have a flexible monetary policy—hence, none of today's governments have a gold standard.

Critics say Nobel Prizes need updating to reflect how science and society work today

The rules still favor individuals over teams and may reflect outdated views on who does science. In 2013, the Nobel Prize in physics went to two theorists, even though over 5,000 scientists helped confirm the Higgs boson.

Some economists argue the national debt is not a critical concern

The US has the largest national debt and one of the highest debt-to-GDP ratios. These vitals have long been considered a sign of poor fiscal health, but economists are beginning to shift their attention to interest rates to evaluate national debt.

The 60/40 method says to allocate 60% of your portfolio to stocks, and 40% to bonds

The 60/40 method used to be the golden rule when planning for retirement, as stocks are more lucrative and bonds are more reliable. However, it isn’t necessarily the go-to recommendation anymore.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

Why diners and chefs are ditching the Michelin Guide

The Michelin Guide's influence appears to be waning, indicating a shift in the perception of fine dining in contemporary culture. Trends show that diners today prefer getting recommendations from more informal networks, especially after lackluster experiences at Michelin-rated restaurants. Some chefs claim the star ratings don’t significantly influence their business, and others reject the pressure of obtaining a Michelin star altogether. Read more about the shift in this article.

Retail investors are not professionals—they invest their own money

For retail investors, the stakes may seem higher and more personal. Critics say that this dynamic means that retail investors are more susceptible to behavioral biases that could lead them to make poor decisions when it comes to buying and selling assets. For instance, fear of missing out could cause a retail investor to buy a stock that is popular but not a financially worthy investment.

Market concentration and high markups don't always signal a monopoly

When regulators and economists evaluate whether a company constitutes an illegal monopoly, they often consider its overall market share or its relatively high price markups. This piece argues that the Olley-Pakes decomposition is a better measure, identifying whether customers within a market are switching to more productive companies.

It has historically been tough for minorities to rise through the ranks in investment banking

According to a Barron’s article, only about 1.3% of the $69T asset management business is managed by firms led by women or minorities—even if their performance is comparable to those led by white men.

Disney’s IP problem, according to industry experts

Disney seems to be an unstoppable force in the entertainment industry, but after an unprecedented high point in 2019, the company began losing money. In this podcast, two industry veterans discuss what they see as Disney's existential problems: an overreliance on preexisting material and an inability to innovate as it once did.

The US dollar is the most widely circulated currency in the world, and is involved in nearly 90% of global transactions

A century of Billboard issues documenting the evolution of popular music.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Despite being favored by 87% of Americans, Congress does not have term limits.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Frank Lloyd Wright's houses are historically hard to sell because they're old, subject to local landmark commissions, and often unfashionable

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

As of 2025, the most cited papers in science include a review of graphene, methods to improve image recognition, streamlining electron density calculations, and optimizing protein studies.

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

Electrical grids worldwide must double their power delivery capacity by 2050 to meet surging demand from AI and electric vehicles.

Browse a detailed visual analysis of over 200,000 similes—comparisons that often use 'like' or 'as'—from popular fiction to see how frequently writers the same idiomatic expressions.

'Saturday Night Fever,' the 1977 film that introduced disco to the mainstream, was based on a fabricated magazine story.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

Studies suggest when you sleep is as important as how much you get, and syncing with your circadian rhythms may lead to less fatigue and improved long-term health outcomes

Dorothy's famous entrance into Oz in 'The Wizard of Oz' relied on analog tricks, including a body double and sepia-toned paint, as much as it did on technology

Most of the observable universe's volume consists of voids and supervoids—enormous regions of space with little to no galaxies, stars, or light.

Fear or disgust related to clusters of holes and cracks, called trypophobia, may stem from evolutionary processes to help us avoid pathogens.

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

Famed poet TS Eliot rejected the manuscript for George Orwell's political fable 'Animal Farm,' writing that its criticism of authoritarianism was not 'the right point of view.'