1 Sep 2015

Deconstructing the Dow Jones Industrial Average

In last week’s market turbulence when the Dow Jones Industrial Average (DJIA) fell by 1,100 points in a single day, I had to talk about something that I don’t like talking about: the DJIA itself. For the most part, I’m able to avoid talking about the DJIA, which is nice, because I think the index is pretty much an almost worthless relic of history. That said, when markets are volatile and… Read More

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29 Jul 2015

When the Index is Wrong

When you buy an index fund, it’s natural to expect that your fund will earn basically the same return as the index. In a perfect world, you should expect an index fund to earn the index returns minus the cost of the index fund.  If an index fund charges 0.1 percent annually and an index earns 10 percent, you should expect to earn 9.9 percent. There are other reasons why… Read More

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