Editing Dow Jones Industrial Average (section)

=== Issues with market representation ===
With the inclusion of only 30 stocks, critics such as [[Ric Edelman]] argue that the DJIA is an inaccurate representation of overall market performance compared to more comprehensive indices such as the S&P 500 Index or the [[Russell 3000 Index]]. Additionally, the DJIA is criticized for being a [[price-weighted index]], which gives higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative industry size or market capitalization of the components. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the lower-priced stock experienced a larger [[percentage]] change. In addition, a $1 move in the smallest component of the DJIA has the same effect as a $1 move in the largest component of the average. For example, during September–October 2008, former component [[AIG]]'s reverse split-adjusted stock price collapsed from $22.76 on September 8 to $1.35 on October 27; contributing to a roughly 3,000-point drop in the index.<ref>{{cite news | last=La Monica | first=Paul | url=https://money.cnn.com/2008/09/14/markets/thebuzz/ | title=Toss AIG from the Dow! | work=[[CNN]] | date=September 15, 2008 | access-date=September 15, 2019 | archive-date=October 29, 2019 | archive-url=https://web.archive.org/web/20191029130700/https://money.cnn.com/2008/09/14/markets/thebuzz/ | url-status=live }}</ref>

{{As of|2021|06|post=,}} Goldman Sachs and UnitedHealth Group are among the highest-priced stocks in the average and therefore have the greatest influence on it. Alternately, Cisco Systems and Coca-Cola are among the lowest-priced stocks in the average and have the least sway in the price movement.<ref>{{cite web|url=http://indexarb.com/indexComponentWtsDJ.html|title=Index Component Weights of Stocks in the Dow Jones Industrial Average|publisher=Ergo Inc.|website=Index Insight and Market Timing Tools: Futures, Equities, Options|access-date=July 25, 2014|archive-date=July 28, 2014|archive-url=https://web.archive.org/web/20140728160411/http://indexarb.com/indexComponentWtsDJ.html|url-status=live}}</ref> Critics of the DJIA and most securities professionals{{Who|date=August 2024}} recommend the [[capitalization-weighted index|market-capitalization weighted]] S&P 500 Index or the [[Wilshire 5000]], the latter of which includes most publicly listed U.S. stocks, as better indicators of the U.S. stock market.