In February of 2008, Bank of America was added to the Dow Jones Industrial Average. Five years later, it was taken out. This month, we were notified that Apple would be joining the price-weighted index. They were a candidate to be added back in 2008, with a market value of $100 billion and only one full year of iPhone sales. The tech giant has grown over 700% in that time, while still trading around the same price after a 7:1 split in 2014. In a hypothetical analysis, Bloomberg attempted to recreate the DJIA’s performance with the addition of Apple instead of BoA in 2008. The resulting chart, shown here, puts into perspective how much of an impact Apple has on the market. Just last year, Apple accounted for about 11% of the total return provided by the S&P 500, a cap weighted index.
March 30, 2015