Jongo I hear you on the DOW. When I first heard (years ago) that the DOW is only 30 stocks I was amazed. The total market cap is HUGE though. Thing is for me is that the DOW is what the world watches. The old saying, when the DOW sneezes, markets around the world catch cold! Yep the NFP is always an important measure.
For the mathematically minded the DOW is based on a simple average of the 30 stocks. All have equal value. XJO and many others around the world are weighted averages based on market cap. i.e. twice the MC than twice the weight in calculating index. That is why BHP, RIO, RMG, and the big 4 banks have such an influence on the XJO (asx200). The top 20 have 46% of the MC of the whole market!! The top 20 is 60% of the ASX200!! Therefore the remaining 180 stocks contribute only 40% to the calculation or the index. The "All ordinaries" is basically the ASX500. The extra 300 stocks mean little really. cheers Mower
