Why You Should Care Less about the Dow Jones Industrial Average
Max Kirouac - Nov 08, 2022
In March of 2020, the Dow Jones Industrial Average (the “Dow”) fell more than 800 points on five separate occasions (and there were a number of other drops of 500+ points sprinkled in for good measure). These were panic-inducing times among investors and the news cycle did nothing to placate these fears. Every news outlet I turned to would blare alarmist, all caps headings like “DOW PLUNGES 1000 POINTS” or “DOW IN FREE FALL”. How could an investor not panic when these are the messages they were continually seeing? I think human beings are vulnerable to events of mass hysteria because we tend to panic first and search for understanding later. I have a sneaking suspicion that a lot of people were worried about these headlines without even knowing what they meant. What is the Dow anyways?