Episode 443: Don't Believe The Hype

Enlarge this image Michael Nagle, Bloomberg/Bloomberg via Getty Images Michael Nagle, Bloomberg/Bloomberg via Getty Images

Note: Today's show originally ran in March 2013.

You may have heard about a big milestone coming up for the Dow Jones Industrial Average. It's been all over the news: The Dow is creeping up towards twenty thousand. It's been hovering just below that mark for weeks now. And people are kind of freaking out.

But here's the thing about the Dow: It doesn't matter.

It's no secret that we here at Planet Money think the Dow is a terrible economic indicator. We don't like that it only looks at thirty companies. We don't like the way it does its math. We think it does a bad job reflecting the overall economy. Honestly, we're not sure why everyone is still talking about it.

So, today, to contribute to the frenzy over Dow 20,000, we explain how the Dow is calculated--and why you should ignore it.



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