"Amazon's Inclusion in the Dow Jones Industrial Average: A Mixed Blessing for Investors"

Amazon is replacing Walgreens Boots Alliance in the Dow Jones Industrial Average, while Uber is joining the Dow Jones Transportation Average. However, historical data suggests that stocks deleted from an index often outperform the stocks that replace them. Studies have shown that deleted stocks tend to be down on their luck, while the stocks chosen to replace them are typically riding high. Post-announcement volatility is expected, but the impact of index-change announcements has been steadily declining. The price impact of a change to the Dow is expected to be smaller than for other indices due to the Dow being a price-weighted index.