by Dylan Waller
Market Oracle
The Curious Recovery of the Dow Jones
After delivering stellar gains after America’s economic recovery in 2008, the Dow Jones Industrial Average has stalled, with a 1 year decline of 0.19%. A further examination of the components of the Dow Jones, and most importantly how stronger performing components have replaced some of the sub par links, reveals that its strong benchmark of success after 2008 has been a catalyst for misplaced optimism for America’s stock market. Its current mediocre performance is further troublesome, as one can holistically examine a flurry of sell offs this year in multiple sectors, such as the energy, biotechnology, and banking sectors. The Dow Jones stands as a misleading rosy shaded picture of how America, and most specifically its stock market, has recovered and continues to prevail. Weak fundamentals can easily be seen by examining areas of America’s economy, particularly areas the middle class is most vulnerable to, as well as the stock price losses experienced in other crucial sectors of America’s economy. A list of 30 companies is certainly too small of a sample size to holistically represent America’s stock market, yet I think the modifications and strategic exclusion of vulnerable areas makes the impact of its distortion of reality much stronger than one would initially assume.