The Saving Advice Forums - A classic personal finance community.

Dow Divisor Question

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Dow Divisor Question

    Can someone explain this to me a little more. I understand what it is and how it's used in the DJIA calculation, but what I don't understand is:
    1. What determines when it gets adjusted?
    2. How often it gets adjusted?

    Couldn't this variable number be used to drive up (or down) the average even if the economy was struggling? I guess what I'm trying to understand is couldn't whoever adjusts the divisor manipulate the DJIA if they wanted to based on this number?

    Sorry if this is a stupid question.

  • #2
    Bueller, Bueller....

    Comment


    • #3
      From Investopedia:


      The divisor is adjusted based on " stock splits, spinoffs and changes among the Dow constituents".

      So it isn't some random number that they cooked up and change on a whim.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


      • #4
        Originally posted by disneysteve View Post
        From Investopedia:


        The divisor is adjusted based on " stock splits, spinoffs and changes among the Dow constituents".

        So it isn't some random number that they cooked up and change on a whim.
        Thank you

        Comment

        Working...
        X