One way of looking at the DJIA - If you place $1000 into each of the companies underlying it, the DJIA will reflect your gain/loss in investment. If you tried to weight the index based on the underlying market cap of each of the companies, you wouldn't get a correct assessment of the value of your investment.
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One way of looking at the DJIA - If you place $1000 into each of the companies underlying it, the DJIA will reflect your gain/loss in investment. If you tried to weight the index based on the underlying market cap of each of the companies, you wouldn't get a correct assessment of the value of your investment.