The Dow Jones Industrial Average is a measure of the price of 30 blue-chip stocks traded on the New York Stock Exchange. It’s often just shortened to “The Dow.” The Dow is one of many stock market indices created by Wall Street Journal editor and CNBC personality, Charles Dow. The index was originally created in 1884 with 12 stocks that Charles Dow believed were representative of all industrial companies at the time. Over time, it has evolved to be more of an indicator for the overall health of the U.S. economy. Here are some things you might not know about The Dow Jones Industrial Average.
What is The Dow Jones Industrial Average?
The Dow is a stock market index made up of 30 stocks, with the largest company being Apple. When the index is calculated, the stocks are weighted based on their respective market capitalization. The smallest company in the index is Boeing, and General Electric is the largest. In 1999, GE was replaced by AIG, and in 2007 AIG was replaced by Citigroup. At the end of the day, one share of each company is weighted equally. Why is it called the Dow Jones Industrial Average? Though The Dow has been around since 1896, the name was first coined by Charles Dow, a journalist who worked for the Wall Street Journal at the time. In 1906, he noticed that the Dow Jones newspaper (which later became The Wall Street Journal) was simply called “the Wall Street Journal.
What are the components of The Dow Jones Industrial Average?
The Dow Jones today consists of 30 of the largest U.S. companies by market capitalization. They are: Boeing (NYSE: BA) ExxonMobil (NYSE: XOM) General Electric (NYSE: GE) General Motors (NYSE: GM) JP Morgan Chase (NYSE: JPM) Morgan Stanley (NYSE: MS) Intel (NASDAQ: INTC) United Technologies (NYSE: UTX) Wal-Mart (NYSE: WMT) What is the historical importance of The Dow Jones Industrial Average? “Dow Jones” is an abbreviation for the first names of two of its creators: Charles Dow and Frank R. Johnson. The Dow Jones Industrial Average was created in 1896 and has undergone only seven major alterations, with the most recent change in 1930. The 20 percent drop was due to the stock market crash known as the Great Depression.
Who are the companies in The Dow Jones Industrial Average?
The 30 companies that comprise The Dow Jones Industrial Average account for about 45% of the stock market. If you buy stocks directly from the company, they are not part of The Dow. In addition to these stocks, the remaining stocks in The Dow are a collection of industrial, utility and financial companies. Many of the companies in The Dow are the largest public companies in the world. The Dow hits new highs and new lows daily, as it has for hundreds of years.
Is The Dow Jones Industrial Average good or bad for America’s economy?
The Dow is a way to measure how a range of stocks are performing on the U.S. stock market. It’s considered an important indicator of the health of the U.S. economy because the Dow is representative of an index of all stocks traded in the U.S. The Dow is not a perfect gauge for the economy. The volatility of the Dow is far greater than for the S&P 500 (including stocks that didn’t make the index), the Nasdaq Composite, and other indicators of the stock market. For instance, when the Dow is rising, that means people are buying stocks. When it’s falling, that means they’re selling stocks. That means the current economic activity is moving more quickly than the Dow, so you can’t expect to see the same kind of movements and volatility in the Dow as the Dow and the stock market in general.
Even if you’re not a chartist, stock market investing can be a highly rewarding business. If you want to become a professional stock market investor, you have to go through a series of steps to learn how to invest in the market, calculate your investment return, and build your portfolio. In general, if you keep a portfolio diversified with multiple, diversified holdings, you will outperform the market. However, you must keep your emotions in check and have a strategy for each stock you invest in to avoid mistakes and keep your portfolio intact. These tips should help you become a more successful and profitable stock market investor.