May
10
Built For Marketing: Why The S&P 500 And Dow Are Misleading Investors
BySince the start of the year, the two major U.S. stock market indexes—the Dow Jones Industrial Average and the S&P 500—have (between them) closed at new highs nine times. But do those highs really mean the market is doing better than ever before?
Not necessarily. Human beings pick which stocks to put in these indexes, and their decisions, I fear, are being influenced by marketing. These indexes produce loads of highly profitable licensing fees paid by mutual funds, ETFs and other financial instruments linked to them. Thus the incentives—both direct and indirect—to stimulate investor interest with higher numbers are enormous…
Built For Marketing: Why The S&P 500 And Dow Are Misleading Investors
