the changing face of the Dow Jones Industrial Average

I've talked about how it's impossible to compare your results with the DJIA or any other index because they keep changing the components. The result is that the DJIA eliminates the losers from the group. Remember the survivor bias?

During April, 2004 Dow Jones & Co yesterday replaced three of America's oldest companies in its benchmark Dow Jones Industrial Average in a move that reflects the growing importance of the financial and health care sectors to the US economy.

AT&T Corp, Eastman Kodak Co and International Paper Co will be dropped from the blue-chip Dow index in favor of insurer American International Group Inc, drugmaker Pfizer Inc, and phone company Verizon Communications, Dow Jones said.

The changes help make the blue-chip Dow Jones Industrial Average -- the world's best known market gauge -- more closely mirror the US economy's waning reliance on the factory sector.

"It probably says something, if you look at the components of the Dow, about the overall composition of the US economy," said Deutsche bank analyst Mark Wilde. "If you look at the long term, manufacturing is a smaller and smaller piece."