The stock index you invest in isn't always the most important decision. Here's what matters even more.

The stock index you invest in isn't always the most important decision. Here's what matters even more. Time in the stock market is more important than index selection, as shown by the Dow’s 130-year history. The Dow has delivered a dividend-adjusted return of about 10.4% annually since its creation in 1896, just ahead of the S&P 500’s 10.2%. Over the long run, the paths of the Dow and the S&P 500 have moved in near lockstep despite different construction. Key contrasts include price-weighting in the Dow versus market-cap weighting in the S&P 500, which drives outsized influence to high-priced stocks like Goldman Sachs, which composes roughly 12.3% of the Dow today.

The article uses historical examples, such as Salesforce’s addition to the Dow on Aug. 31, 2020, and IBM’s 1939 removal and later return, to illustrate how composition decisions can alter outcomes over time. The core takeaway is operating with a long horizon reduces risk and can yield outcomes similar to broader indices, making time in the market the true differentiator for investors.