THE Dow Jones industrial average is still going strong despite critics who say it is a relic of the past and should be replaced.
Its champions say the Dow is still the place to make money and a great way to make international investments without investing in overseas companies. Others say that it is a Wall Street tradition that should be preserved.
Even though the Dow is a household name and ordinary people often use it as a generic term for the whole US stock market, critics say it belongs to a different time and has not kept up with changes in the American economy.
They say the 30 components making up the average are no longer even representative of their respective industries.
"My retort is simple: the Dow is better now than it ever was," said Mr Steve Adler, found and manager of ASM Fund and an outspoken Dow defender. He said the Down represented 20 per cent of the equity in the United States.
"That's a pretty broad brush of what's going on," he said.
The Dow's attackers have been equally vocal, saying the average did not take into account the shift in the US economy away from an industrial base toward one rooted in information technology and services.
"It's amazing that the Dow still maintains its cachet with investors," said Mr Michael Metz, chief investment strategist at Oppenheimer & Co. "It dates from a time when the economy was dominated by manufacturing rather than services and technology. It is not where the action is, and I think it's a misleading gauge of where the overall market is going."
High technology, one of the hottest sectors in the market, is represented on the Dow only by International Business Machines (IBM), an illustration, analysts say, of the way the average has lagged behind the times.
The debate is likely to continue well past the Dow's 100th birthday yesterday.
The debate about the Dow goes beyond the practical question of its validity in a changing world. The Dow has been around for 100 years and people have gotten used to it.
Mr Hugh Johnson, chief investment officer at First Albany Corp, was nostalgic, saying the Dow was worth preserving even though most serious economists used the Standard & Poor's 500 Index as a gauge rather than the Dow industrials.
