If you’re trying to follow the latest stock market news, the Dow Jones Industrial Average is one of the most common benchmarks.
Known as the Dow, the DJIA is a collection of 30 U.S. stocks from a range of industries
The components of the Dow are generally considered to be “blue chip” stocks of large companies that are important to the overall U.S. economy, and their performance is a widely used barometer of the stock market. If you want an easy way to buy the Dow, you might want to consider investing in the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA). This fund holds all 30 stocks from the Dow and charges a modest expense ratio of 0.16%.
But the Dow doesn’t always beat the market. Over longer-term timeframes of the past five and 10 years, this Dow ETF has underperformed the S&P 500 index. Instead of buying the Dow in the form of the 30 stocks of the DJIA, a smarter choice for long-term investors might be the Schwab U.S.