Without Alcoa, How Representative Is The Dow?

| About: Alcoa, Inc. (AA)

It was recently announced that the Dow Jones Industrial Average (Private:DJI) was going through one of the most significant shakeups the famous index has seen in years: Alcoa (NYSE:AA), H-P (NYSE:HPQ) and Bank of America (NYSE:BAC) are out and Nike (NYSE:NKE), Goldman Sachs (NYSE:GS) and Visa (NYSE:V) are in. While names like JPMorgan (NYSE:JPM) and DuPont (NYSE:DD) remain in the index, the questions investors should be asking is how representative the index remains given its new composition. The removal of Alcoa means that the Mining and Materials sector is barely represented.

In the video below, I discuss the ramifications of dropping Alcoa from the index and why I believe the move makes the index less representative, as well as why Alcoa is worth a look.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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