Animal Spirits Podcast Talk Your Book: The People's Index
11 snips
Aug 11, 2025 In this conversation, Matt Bartolini, Managing Director at State Street Investment Management, shares his insights on the Dow Jones Industrial Average, unveiling its historical significance and unique price-weighted structure. He contrasts the Dow with the S&P 500 and discusses how market perceptions shape investment strategies today. The dialogue also addresses adapting investment approaches in uncertain markets, particularly with rising allocations to non-U.S. equities and fixed income ETFs, highlighting the ever-evolving landscape of financial markets.
AI Snips
Chapters
Transcript
Episode notes
Why The Dow Is Price-Weighted
- The Dow used price weighting because it was the simplest index to calculate in the 1890s.
- That original design choice persists today despite modern computing power.
The Dow's Original 12 Reflect 1890s Economy
- The Dow's original 12 stocks in 1896 reflect dominant 19th-century industries like tobacco, sugar, oil, and rail.
- Ben Carlson reads the list to show how the index composition mirrored the era's economy.
Main Street Still Watches The Dow
- The Dow retains huge cultural resonance: Main Street still asks, "What did the Dow do today?".
- Matt Bartolini notes his parents call about a 400-point move, illustrating widespread public focus.