The Purpose of the Dow

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There are two great mysteries in this world: the secret of the fox, and the purpose of the Dow Jones Industrial Average .

OK, so we figured out what the fox actually says ages ago, but have you ever stopped to consider what the Dow is meant to do? Spoiler alert: It's not designed to mirror the American stock market. The index is also not looking for the most attractive investment opportunities, or else ExxonMobil and AT&T might have been dropped from the Dow already.

In the video below, Fool analyst Anders Bylund mercifully avoids singing about the mysterious fox. Instead, he's explaining what the Dow really was designed to do and how astute investors can use it as a research resource.

Is this big bank simply too good for the Dow?
Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." And you know what? It's actually not a Dow Jones component, nor has it ever been! You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

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Fool contributor Anders Bylund and The Motley Fool have no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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