if you invested in the makeup of the DJIA in 1929 and left it in those companies
Then you would no longer be investing in the DJIA as new companies were added.
But if you rebalanced periodically, you’d get the listed results.
So “line goes up” by definition is not really an endorsement that all companies lines go up
Diversification is one of the first lessons of practical investment. And blue chip indexes help simplify this process
If you switched from the DJIA to the S&P 500 or the NASDAQ, as these indexes emerged, you’d outperform the DJIA as it stood. I use the DJIA because it existed in 1929 while the others did not.
Then you would no longer be investing in the DJIA as new companies were added.
But if you rebalanced periodically, you’d get the listed results.
Diversification is one of the first lessons of practical investment. And blue chip indexes help simplify this process
If you switched from the DJIA to the S&P 500 or the NASDAQ, as these indexes emerged, you’d outperform the DJIA as it stood. I use the DJIA because it existed in 1929 while the others did not.