Investing in the Dow or S&P 500 doesn't matter - here's what actually does

Time in the stock market matters more than index selection, and the Dow's long arc confirms this. Since its 1896 origin, the Dow has produced a dividend-adjusted 10.4% annualized return, compared with 10.2% for the S&P 500. Over the past 130 years, their paths have remained closely aligned despite differing compositions. The Dow’s price-weighting means a high-priced stock carries outsized influence; Goldman Sachs, trading just above $1,000, now accounts for roughly 12.3% of the index, far more than its S&P 500 weight. Notable turnover includes Salesforce's addition in 2020 and IBM's removal in 1939 (and re-entry), illustrating how index rules shape outcomes.