⁍ The index, which purports to include 30 of the biggest and best-known US stocks, has had numerous companies rotate in and out over its 135-year life.

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⁍ The trigger for this rebalance was rather unusual: Apple’s four-for-one stock split, which occurred at August’s end.

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⁍ After the split and the reshuffle, Apple fell to the middle of the pack, greatly reducing its influence on the index’s return.

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– The Dow Jones industrial average got a makeover this week, and not everyone is happy about it. Here’s what people are saying: “The Dow is a poorly constructed index and useless measuring stick for portfolio performance,” says an editorial at Fisher Investments. “It is a relic of a long-gone era when the US had few publicly traded companies and dividing them into two categories—Transports and Industrials—adequately represented the broader economy, more or less. But it doesn’t materially influence returns.” For example, Exxon was the fourth-smallest weighting in the Dow, yet it was the 33rd-largest company in the S&P 500, with a market capitalization of more than $175 billion. “That the Dow had a long-running blind spot to such a key industry illustrates the drawbacks of trying to represent the entire US stock market with just 30 stocks,” the editorial says. “In Fisher Investments’ view, it is simply impossible to diversify adequately with so few holdings.” “Apple’s four-for-one stock split at the end of August … showed why the Dow is a poorly constructed index and useless measuring stick for portfolio performance,” the editorial concludes. “After the split and the reshuffle, Apple fell to the middle of the pack, greatly reducing its influence on the index’s return—even as its influence on cap-weighted indexes didn’t waver.” “So ditch the Dow,” the editorial concludes.