What is the Dow Jones Index? Dow Jones index chart online.
"Index Dow Jones today ... ”- the housewife hears from the TV and switches the channel. “That's it, the financial news has begun,” she thinks. - nothing more interesting. Give me 10 minutes and I'll explain to you why the housewife is wrong.
"Index" is a scary word until you figure out what it means. In our case, an adequate synonym is "indicator". Dow Jones, is that better? Fine. It remains to figure out what the oldest among the existing index shows us.
Dow Jones is a stock index, a kind of "virtual portfolio" or a collection of 30 shares of America's largest companies. In general, indices are different: for example, the 500 most valuable companies in the United States, or even a whole set of countries, the index of small capitalization enterprises developing countries. Industry - an index of the most expensive companies in the IT sector. In general, the index can reflect anything.
Online chart and price for DJI for today
An interactive online chart of the Dow Jones Index can be viewed here.
Which companies are included
Companies included in the DJ index are rich and respected. The 30 giants are not included in the group of largest companies because they belong to the industrial sector, although the full name of the indicator includes this word. The main requirement from companies is to increase profits every quarter for 4 years.
The list of companies changes frequently - approximately every 2 years, but their number remains unchanged. It is difficult to predict changes, they depend on the company's strategy or global market events. For example, 7 times the composition of the Dow changed in 1999, when the world learned about the Internet. 25 times the deck was shuffled during the Great Depression.
Dow Jones line-up regularly publishes wall street Journal. If you want to know more about how indexes differ, check out .
Name | Ticker | Name | Ticker |
DowDuPont Inc. | DWDP | 3M | MMM |
Exxon Mobil | XOM | American Express | AXP |
Goldman Sachs | GS | Apple | AAPL |
Home Depot | HD | Boeing | BA |
IBM | IBM | Caterpillar | CAT |
Intel | INTC | Chevron | CVX |
Johnson & Johnson | JNJ | Cisco | CSCO |
JPMorgan Chase | JPM | Coca Cola | KO |
McDonald's | MCD | Disney | DIS |
Merck | MRK | Procter & Gamble | PG |
Microsoft | MSFT | Travelers Companies Inc. | TRV |
Nike | NKE | United Technologies | UTX |
Pfizer | PFE | UnitedHealth | UNH |
Verizon | VZ | wal mart | WMT |
Visa | V | walgreen | WBA |
Index history
Three people came up with the indicator, and it is called in honor of two of them. I restore justice by taking off my hat to Charles Bergstresser (even if he has a surname - you will break your tongue). It was he who came up with the name "The Wall Street Journal" and became its founder. The businessman, along with two friends - Charles Dow and Edward Jones - opened a financial information agency, investing money saved up in college.
That Charles, who is the Dow, became the father of technical analysis, having developed stock theory. All traders know her because she studies basic indicators.
Charles invited Edward Jones as a financial analyst, and in another newspaper, in which journalists worked before his magazine. Edward then worked as a broker.
At first, the calculation included the papers of 9 railway magnates, one shipping company and a bank. For the sake of this, the then thin bulletin - only two pages of invaluable information - sold well. A trio of analysts hired 50 employees and opened a newspaper known today. Then the indicator estimated 20 companies, and not 30, as it is now.
The headquarters is located in the city of New York, the largest stock exchange is also located here.
Types of DJ
The DJ DowJones industrial index can be written in short - DJI (and DJIA is, by the way, futures). We have already understood that it does not apply to industry. In addition to it, there are such options:
Cost and dynamics for all time
In February 2018, the stock exchange, if not fell, then went down on one knee: for the first time in 7 years, the Dow Jones index lost 1,000 points. Then the Asian stock exchange pulled up, having weakened for the first time in 15 years. Of course it hurt world economy generally. Why?
This indicator is American, and half of all exchange transactions are concluded in the States. Dow Jones is simple and clear, it includes only market leaders. He is sensitive to political and social events. Therefore, its fluctuations have such an impact on financial markets.
5 Most Crushing Dow Falls
Financial analysts are greedy for epithets - "Black Monday", "Black Tuesday", and so on - depending on when the market collapsed. His story is one black spot after another.
- It all started with the Great Depression in 1929 - an 11% weakening of the Dow Jones in one day!
- Then there was a 22.6% drop in 1987. After him, economists began to rewrite the entire market theory: there was no reason for the collapse.
- The Dow Jones lost about the same amount in 1998. This led to inflation in Russia: we lost all our savings.
- The situation was different on Black Monday 2008. Then the global market lost 46% of capital. The US mortgage bubble burst. This was also a market correction, but painful and protracted for as much as 2 years. The Dow Jones fell 8% in 2008.
- In 2018, February became black, from the 7th to the 9th. The US Federal Reserve System (FRS) pleased the Americans with a new report: government bonds have become more profitable than before.
In response, investors began withdrawing money to buy bonds. When such an avalanche of stocks is put up for sale, the rate drops. So, the market lost $114 billion, that's 4% of the Dow Jones. Only the ladies in the news studios panicked, and investors understood that the market was simply stabilizing.
Trump in his new position strengthened the market by raising the market index by a third: Americans' salaries rose, unemployment decreased. After intensive growth a decline was inevitable.
And every time the crisis in the United States pulls the stock exchanges of all other countries. Fortunately, the growth of the Dow Jones also promises profit for the global market: the Asian markets are the first to react, then the European ones.
This happened quite recently: in July 2018. The state of the markets began to recover after the threat of a trade war between the United States and China: the countries entered into negotiations on new tariffs. The most objective was the Dow, rising 2.4% in a week. The reason is that the dynamics of the Dow Jones index is oriented towards imports, not exports, and this is important when discussing a trade war.
Calculation method
How is the index calculated? Dow Jones takes the sum of the stock prices of 30 companies, and then it, by a special number, to get the average value. This number is a correction factor, you can see it next to the index chart.
The resulting value is measured not in dollars, but in points. It's not hard at all if you're good with percentages. Some amount is taken for 100 points, or 100%. The amount decreases - the points fall. For the index to be seriously affected, several shares of different companies must fall in price at once.
Advantages and disadvantages
There are a lot of indexes in the USA, and they are always compared with DJ indicators. The Dow Jones itself likes papers with a high price, even if the issuing company is smaller than its portfolio neighbors. So it turns out that the indicator is most affected by companies with expensive shares, and this is wrong when their capital is modest.
This is due to the correction factor. But he's not that bad. You cannot derive the arithmetic mean by dividing the amount of shares by 30: then the market dynamics will be overboard.
The index at least takes it into account, but shareholders still evaluate the Dow Jones against the background of another important indicator - the Standard & Poor 500. This is also an index, and it has a base indicator, unlike the Dow.
How and where to make money on the index
The index is an old, effective tool used by both billionaires and ordinary people. For example, an inexperienced investor wants to preserve capital. What does the world practice offer?
Buy securities of all companies from the index at once, invest a little on each. One goes down, the other goes up. I wrote a lot about how to do this the easiest way, but you can start. The income, of course, will be the average market, but you can keep a pension - the money will not melt from inflation.
The method is so popular that a new one has appeared financial instrument- . They copy the composition of some index for the portfolio and enclose it in one security. So, an investor buys one paper, and with it - a whole portfolio.
The most popular Dow-based funds:
- DIA by StateStreet
- UDOW and DDM from ProShares (with leverage)
You can buy such a fund through one of the popular foreign brokers:
Interactive Brokers CapTrader Exante Just2Trade
In fact, the only real major American broker that still works with the Russians.
- There is support in Russian
- Good Commissions
- The deposit can be replenished in rubles (bypassing currency control)
I'll take the cons:
- Minimum deposit 10.000$
- Inactivity fee
The company is an American "daughter" of Finam and was created to bring clients from the CIS to the American market.
- The easiest way to open an account
- Russian-speaking support
- Opening an account from $200
- Fairly high fees
- Various additional payments
(DJIA) is one of the most authoritative stock indices in the world. Introduced 120 years ago, in 1896, Dow Jones evaluated only the American transportation sector. Today, along with the S&P, it is a measure of the value of the whole world and is traded on (New York Stock Exchange, NYSE).
The capitalization of 30 participating companies exceeds 5 trillion. US dollars and continues to grow.
All structures are the largest in the world, and the impact they have on financial processes, is difficult to overestimate. This is Apple, Boeing, Coca-Cola, Intel, MacDonald's, Microsoft, American Express, DuPont other. There was no place even for a titan in the company - Google.
It is the oldest and most referenced index. It is calculated by adding the closing prices of all its constituent shares and dividing the resulting amount by a divisor, which is calculated in a certain way. Like all the other indices we're talking about here, the Dow is expressed in points (not dollars).
Dow Jones Chart Online - Price Today and All Time
Composition and Companies of the Dow Jones Index
The list of corporations included in the Dow Jones index varies depending on the results of trading on the stock exchange. The formation of 30 companies most important for the United States market is handled by Wall Street Journal» .
At the moment it looks like this:
- 3M Co. (Industry)
- american express co. (Finance and lending)
- AT&T(Communications and Communications), Owned by Apple since March 18
- Boeing Co.(Aircraft)
- Caterpillar Inc.. (Cleaning and construction equipment)
- Cisco Systems(Communication and communications)
- Chevron Corp.
- coca-cola co.(Food)
- E.I.duPontdeNemours&Co.(Chemical industry)
- Exxon Mobil Corp.. (Production and processing of hydrocarbons)
- General Electric Co.. (Industry)
- The Goldman Sachs Group, Inc.. (Finance and lending)
- Home Depot Inc.. (Building materials)
- Intel Corporation. (Production of semiconductors)
- International Business Machine Corp.. (Computer technology)
- JPMorgan Chase and Co. (Finance and lending)
- Johnson&Johnson Inc.. (Chemical industry)
- McDonald's Corp. (Food)
- Merck&Co., Inc.. (The medicine)
- Microsoft Corporation. (Software production)
- Nike Inc.. (Sporting goods)
- Pfizer Inc.. (The medicine)
- Procter&Gamble Co.. (Chemical industry)
- Travelers(Finance and lending)
- United Health Group Inc.(The medicine)
- United Technologies Corp.. (Industry)
- Verizon Communication(Communication and communications)
- Visa Inc..(Finance and lending)
- WalMart Stores, Inc.. (Retailer)
- Walt Disney Co.. (Media)
Index history
The Dow Jones index can be said to be a "dinosaur" among modern stock market indices in the United States. It was born with a clear task: to track and visually reflect the dynamics of the industrial sector of the American stock exchange.
The concept was invented by the editor-in-chief Wall Street Journal and economic observers Edward Jones and Charles Dow. The indicator was not comprehensive and assessed only transport infrastructure USA - 9 railways and 2 industrial enterprises. The first name was " Dow Jones Transportation Average» - Dow Jones transport value.
In 1884, when Charles Dow began writing an economics column for the Wall Street Journal, the index was defined as 50 basis points. After a series of economic crises that occurred in the US every 7-10 years, transport companies dropped out, and the index was renamed "" (Dow Jones Industrial Index - DJIA or Dow 30).
Presentation Dow Jones with the familiar prefix " industrial”(Industrial Average) occurred on May 26, 1896. Now it reflected the arithmetic mean of the securities prices of 12 most important US corporations. To date, only one of these issuers has survived in the ranks of DJI: General Electric(it was excluded from the index from September 1898 to April 1899 and from April 1901 to November 1907).
- The first blow fell on 1896, when the quote fell to 28.48 basis points. The beginning of the first world war, 1914, the Dow Jones met at around 103 points, although due to the crises of 1901 and 1907, it dropped to 50 marks. The economic recovery of the 1920s led to a change in the structure: the number of participants reached 30. The quote, thanks to speculators, exceeded 381 points.
- Into the great depression the index began to decline. By 1932, it barely exceeded 42 basis points, while by the mid-1950s it had crossed the mark of 216 points. Everything affected the growth, and the decolonization of European possessions, and numerous fighting around the world, so in 1951 and 1957 the US government had to carry out a forced decline in the index.
- First strike of the new time fell on 1987, when the DJIA fell from 2,753 to 1,796 points, which is not surprising: in 10 years, the bulls managed to raise the quote from 838 to 2,753 points! By 1993, it exceeded 3,000 points, 1995 - 5,000 points, 1997 - 8,000 points. World economic crisis served in good stead, and by 1999 the mark of 11,000 base marks had been reached.
- The fall of the Twin Towers on September 11, 2001 dropped the index by 14.3%, and trading from 11 to 17 September was stopped. The recovery, which lasted until 2008, ended with a drop in oil prices, and the Dow Jones dropped from 14,000 to 11,000 points. Until the summer of 2015, the bulls took the initiative, and the Big Dow crossed the 18,000 basis mark several times.
Dow Jones index value
How to make money on the Dow Jones
One side Dow Jones index easily lends itself to analytics, as there is a lot of news on the index. For example, many exchange participants work only with this index, making dozens of transactions per day.
But on the other hand, it is very difficult to analyze the index, since it is not always possible to keep track of everything. In addition, the price of the index is influenced not only by the companies included in it, but also by the world economy and politics.
For example , in 2015 The Dow Jones hit an intraday high of five months. And all this thanks to the news from Russia. According to the Secretary of the Security Council, Russia decided to continue to act as an intermediary between Kyiv and the South-East of Ukraine and make efforts to de-escalate the conflict.
As you can see, the news is not at all related to Coca-Cola and other companies in the index, but it affected the US economy, political stability and the Dow Jones index as an indicator of the US economy.
In order to make money on the Dow Jones index, it is important to understand that this index has become the personification of Wall Street and American economy generally.
In you need to follow the US industrial data, the most important economic indicators with a high degree of importance.
You can use forecasts in which the index is named US 30— this name of the index is quite common on some exchanges.
On the page market watch(http://www.marketwatch.com/investing/index/djia/news) you can view the most latest news concerning the index.
As you can see, technical analysis it does not always help here, since the price of the index directly depends on the economic and political situation in the world. News comes out quite often and the index follows world events. Personally, I'm not convinced that indicators or other technical analysis tools can accurately predict price. maybe I'm wrong, but it seems to me that fundamental analysis in this case will be more reliable in the long run.
Where to make money on the Dow Jones index
We preferred a broker. In order to capitalize on the index in the most profitable way, it is best to use, as they will give you a fixed profit of over 70% per trade.
You need to determine whether the price will rise or fall in a specified period, for example, in the next 20 minutes. Specify the term of the option, the amount of investment and indicate your forecast.
If your prediction is correct, you will receive 70-85% profit even if the price changes even by 0.001 points in the direction of your forecast.
Having opened, we indicated the asset - Dow Jones index:
The time of the end of the transaction indicated on 18:10 (in 16 minutes):
After analyzing the chart and conducting technical analysis, we invested in the growth of the index — “ UP«:
If at the time of closing the option the price of the index is higher than at the time of purchase, we will make a profit since the condition of the option will be fulfilled.
After 16 minutes, we got the result:
The chart shows how literally after the opening of the transaction, the quote on the Dow Jones crept up according to our forecast. DJA brought us $42.9 in net profit!
Dow Jones Calculation Method
The Dow Jones index takes into account the 30 largest US corporations. The name "industrial" refers more to a good tradition than to a real reflection economic indicators. At the moment, most of the issuers present in the index are not related to the industry and represent more post-industrial spheres information services and technologies.
The calculation method is simple: the total value of the 30 shares traded is divided by the floating rate, which changes regularly based on stock splits, additional income and expenses, changes in the structure of the participants' companies. Initially, the divisor was the arithmetic average of the capitalization of companies, now it is calculated using a special formula.
In this formula P is the price of the stock being traded, and d- divider. As mentioned above, it is of a floating nature, and in case of a share split or a change in the list of companies, it is updated, but the old quote is taken equal to the new one.
- The latest value of the Dow Divisor (December 24, 2015) is +0.14602128057775. Arithmetic calculations show that a $1 change in the price of 1 share gives the index approximately 6.85 basis points (1 / +0.14602128057775). This scheme causes serious complaints from economists and stock analysts around the world.
The formula, taking into account a price change of $1, does not reflect the price of a share and the share of one dollar directly in it.
For a cheap stock, this will be a serious rise, for an expensive one, a barely noticeable adjustment.
In October 2008, the shares AIG because of the "bears" they fell from 27 to 1.5 dollars, which dropped the stock index by 3,000 basis points.
And further: The most expensive companies in the index are Goldman Sachs and 3M, the cheapest are Cisco Systems and General Electric. Considering that the price of shares of companies varies significantly, and there are different amounts of valuable papers, the first two corporations play the maximum role in the index, and the last two the minimum. The decline in their quotes will have a greater impact on the market than others.
Dow Jones Index dependencies
- too few companies participate;
- members of the index are unequal in terms of capitalization and market impact;
- the collapse of just one of 30 companies hits the entire index;
- highly dependent on oil prices and US foreign policy;
- contains only 1-2 companies from different sectors of the economy.
Benefits of the Dow Jones 30 Index
- Determines the stock quotes of the whole world;
- Shows steady growth despite the collapses;
- With a speculative nature, it reflects the real level of the economy;
- We easily predict taking into account the political situation;
- Seriously tied to oil prices.
The Dow Jones family includes several dimensions, the most important and significant of which was and remains the Dow Jones Industrial Average. Also known:
- Dow Jones Transportation Average;
- Dow Jones Utility Average;
- Dow Jones Composite Average;
- The Global Dow;
- Dow Jones Global Titans 50 Index;
- Dow Jones Total Stock Market Index;
- Dow Jones Sustainability Indexes;
- Dow Jones-UBS Commodity Indexes;
- Dow Jones Target Date Indexes.
There are no uniform rules for the inclusion or exclusion of members in the Dow 30, the decision is made by a board of stock analysts headed by the editor-in-chief of the Wall Street Journal.
There are also no selection criteria, they are based on financial results participants over the past few months. This has repeatedly caused criticism from experts, but the WSJ is one of the founders DJIA.
Working with the Dow Jones 30 is one of the key skills of any trader, both a beginner and a very successful one.
The situation on everything depends on this indicator. financial market of the world, and DOW 30 signals should not be neglected in any case.
This is a proven tool that is certainly an extremely interesting tool for tracking stock fluctuations, despite its age and outdated approach to calculating values.
Of all the tracking Dows index funds— or , the most popular is the fund Dow Diamonds(his ticker is DIA).
If you find an error, please highlight a piece of text and click Ctrl+Enter and we will definitely fix it! Thank you so much for your help, it is very important for us and our readers!
The course of the US stock index Dow Jones Index (Dow Jones index) today.
Index value for today. Quotes of the Dow Jones stock index online. Streaming chart of the Dow Index (Dow Jones Industrial Average, DJIA) in real time. Dow Jones stock index futures chart online. The time on the chart is Moscow GMT+3.
Daily schedule. One division (one candlestick) is one day. The Dow Jones Index online chart will help you analyze the stock index futures price.
The timeframe (time interval of quotes on the chart) can be changed independently, in the upper left part of the chart. From 1 minute to 1 month.
There is no need to update the Dow Jones index chart online, prices are received in real time.
(wait a few seconds after the page loads - the graph will appear)
HIGHLY PROFITABLE PROJECTS full list(click me)
HYIPs that pay
Name | Short description | Review | Refback (to you from the deposit) |
---|---|---|---|
trading company | 2% | ||
investments in cryptocurrency exchange | 3,5% | ||
investments in financial markets | 3,5% | ||
cryptocurrency mining | 4% | ||
currency exchange | 2,5% | ||
products to China | 2% | ||
microfinance organization | 1,5% | ||
cloud mining | - | ||
artificial intelligence development | 2.5% of the deposit |
Find any chart you need online:
FOREX CHARTS
CRYPTOCURRENCY CHARTS
CHARTS OF MARKET INDICES
COMMODITY CHARTS
You just have to save the page to your favorites so that you can return to it and, if necessary, find out the current values of the Dow Jones index. To save a page to your favorites, press Ctrl+D. Press the Ctrl key and without releasing it press the D key.
About Dow Jones stock indices
The Dow Jones is the oldest American stock index. The Dow Jones Index was created by Charles Dow, editor of The Wall Street Journal, in 1896 with Edward Davis Jones. Initially, the base for calculating the index included 12 largest US companies (now 30), the so-called blue chips.
The most popular stock index is the Dow Jones Industrial Average (DJIA, Dow 30) - Dow Jones industrial index. However, the word industrial is rather a tribute to history. Many companies have long been out of the industry (for example, Coca-Cola, Microsoft and McDonald's), and the companies that were part of it then have become covered with the dust of centuries.
Dow Jones Transportation Index- The Dow Jones Transportation Average (DJTA) is an indicator that characterizes the movement of prices for the shares of 20 transport corporations (airlines, railway and road companies).
Dow Jones Communal Index— The Dow Jones Utility Average (DJUA) is an average of the movement of the stock prices of 15 gas and electricity companies.
Composite Dow Jones- The Dow Jones Composite Average (DJCA) is an indicator compiled on the basis of the Dow Jones industrial, transport and municipal indices. The Dow Jones Composite Index is calculated on 65 stocks.
Other stock indices
In addition to the Dow Jones index, the main US stock indices also include the NASDAQ and S&P 500 (Standard & Poor's 500 Index). The NASDAQ index reflects the stock price of the 100 largest technology companies, while Standard & Poor's is the most complete cross-section of the largest US companies (500 shares).
What is important to know about stock indices
The value of the stock index is not the price. This is a figure that characterizes the change in the index over time in relation to the initial value, i.e. abstract figure. For example, the initial value of the Dow Jones index was 100, now it is 16115. And the value of the SP500 index today is 1900. In indices, it is the dynamics of change that is important, and not the value of the number.
The most important thing is that the numbers of the value of stock indices are increasing - the market is growing. The values of stock indexes decrease - the market falls.
The stock index is a very volatile trading instrument. Volatility is mobility, sharpness of movements. Moreover, stock indices are very unpredictable instruments. Now he falls like a stone, and an hour later he takes off like a rocket.
Welcome to Financial Genius! Today we will talk about the famous Dow Jones index. I will tell you about what the Dow Jones index is, what it consists of, how it is calculated, what it means, and in general, what it is for and how it can be used. This information will be useful not only to those who are engaged, but also to any person for general development and the ability to competently understand and interpret world economic news.
What is the Dow Jones Index?
So, the Dow Jones index is one of the largest, which is calculated in the USA and reflects the state of American industry.
The full name of this indicator is the Dow Jones Industrial Average. This is the first stock index invented in the USA in the second half of the 19th century by Charles Dow, the founder of Dow Jones & Company, together with the editor of the largest American edition of the Wall Street Journal, Edward Jones (by the way, this newspaper is still reviewing the companies included in the calculation of the indicator) . For the first time, the Dow Jones index was officially published in 1896, and before that, since 1884, its first version already existed, which was not published anywhere, but was used by its authors for analytical research.
The very first published Dow Jones index was the arithmetic average of the stock prices of 12 largest US industrial companies. By the way, it is interesting that today's Dow Jones index includes only one of these companies - General Electric.
At the beginning of the 20th century, the number of companies in the index was first increased to 16, and then to 30, which remains today. Rotation of companies in the index was carried out periodically - new companies replaced the old ones.
Dow Jones index today: composition and significance.
Currently, the calculation of the Dow Jones index includes the cost of ordinary shares 30 largest US enterprises in various industries. Among them are industrial corporations, oil and gas companies, enterprises of the chemical and pharmaceutical industries, food industry, telecommunications companies, a chain of restaurants Catering, entertainment industry enterprise, financial, credit, insurance company, payment system and etc.
The most famous companies whose shares are included in the calculation of the Dow Jones index are American Express, Boeing, Coca-Cola, Johnson & Johnson, McDonald's, Microsoft, Nike, Procter & Gamble, Visa, Walt Disney.
Shares of almost all of these companies are listed on the New York Stock Exchange NYSE, and three companies are listed on the Nasdaq. At the same time, the total capitalization of companies included in the Dow Jones index is about 15% of the capital of all companies listed on the stock exchange.
The most recent approval of the composition of the Dow Jones Index took place on September 20, 2013.
If initially the Dow Jones index was calculated as a simple arithmetic average of the prices of all the shares included in the index, now the calculations have become a little more complicated, and this is already a scalable average, which allows taking into account changes in the internal structure of the securities taken into account. That is, the current Dow Jones index shows average cost shares in those shares of capital that were selected for calculation at the time of approval of the composition of the indicator. Thus, the denominator of the calculation formula is constantly changing, which makes it possible to bring the Dow Jones index as close as possible to the real structure of the American economy.
The Dow Jones Index shows how the value of the shares of the 30 largest US companies changes. It can be considered the main indicator of the American economy, an indicator of business activity not only in the US, but also in the world, because the companies included in the index are widely represented around the world. When the Dow Jones index rises, this indicates an increase in business activity, an improvement in the investment climate, an increase in demand for shares of American companies from investors. Investors buy stocks with the expectation that they will rise in value and generate dividend income. Accordingly, if the Dow Jones index is growing, it means that the growth of company profits is predicted, and, to some extent, the growth of the American and world economy. If the Dow Jones index falls, the opposite is true.
Dow Jones index: graph and dynamics.
Now I will tell you a little about the dynamics of the Dow Jones index for the entire period of its existence, I will focus on the most significant points. This is what the Dow Jones index chart looks like over the past decades, starting in 1985:
In general, in the long term, since the very beginning of its existence, the graph of the Dow Jones has constantly grown. The very first published value of this indicator was only 40.94, and today it exceeds 18,000 (!). Thus, for more than 100 years of its existence, the Dow Jones index has grown by about 440 times (!), in fact, this figure can be roughly considered an increase in the capitalization of the American economy.
In 1966, the indicator for the first time broke through the psychological mark of 1000, its especially rapid growth began in the 80s, and even stronger in the 90s of the last century. So, in 1995, the mark of 5,000 was overcome, and already in 1999, 10,000.
The largest medium-term drop in the Dow Jones index was observed in 2008-2009, when it began. Then, after previously reached highs above 14,000, it fell below 7,000 - more than 2 times, but after that it recovered and continued its growth, which is observed to this day.
The largest daily drop in the Dow Jones index was recorded in the so-called. "Black Monday" October 19, 1987 - on this day the indicator fell by 22.6%. After the September 11, 2001 terrorist attack on the United States, the Dow Jones fell by 7.1%.
Disadvantages of the Dow Jones Index.
Despite the fact that the Dow Jones index is still considered the main indicator of the global economy, it has its drawbacks. The main one is the relatively small number of companies whose securities are included in the calculation of the indicator - there are only 30 of them. For this reason, in order to draw more accurate conclusions, investors and analysts often consider the Dow Jones index in combination with the S&P 500 index, which includes shares of 500 US companies.
In addition, despite changes in the methods of calculating the indicator, many consider it imperfect. For example, because when calculating the Dow Jones index, only the current value of shares is taken into account, without comparing it with its initial value or some base value on a certain date, as happens when calculating some other indices. Also, the value of the indicator is more influenced by the most expensive of the securities included in the index, and not all equally.
Application of the Dow Jones index.
The Dow Jones Index is an indicator that is always closely watched by investors around the world, even those who have nothing to do with the US stock market. The fact is that changes in this index have an indirect impact on the dollar exchange rate, and the dollar exchange rate, in turn, affects everything, any investment assets.
In addition, the Dow Jones index itself also acts as an exchange asset - traders around the world buy and sell it through futures contracts, earning on changes in quotes.
Now you have a basic understanding of what the Dow Jones index is, how it is calculated and what it shows, which means you can correctly interpret economic and financial news that will mention the growth or fall of this indicator.
Raise your financial literacy together with . Join the number of our regular readers, and you will learn a lot more interesting and, most importantly, useful. Until we meet again on the pages of the site!
Within a few recent years financial crises wave-like roll over the world economic community. Truly creepy name. Dow Jones begins to rock public and political life again and again, exerting ever greater influence on international concerns and companies, banking activities and industrial enterprises. Some people rejoice that this notorious index rises or falls. What is the main essence and how is its fluctuation reflected in world business.
History of the Dow Jones Company
To what extent is all this possible and how does some abstract index affect the parameters of the development of the world economy on such a global scale that it is simply impossible to cope with this situation with the help of simple levers of influence. Historically, the rise of this completely incomprehensible index affects all countries, no matter what continent they are on. Where did this influential index come from and how did it become so powerful? This figure is so influential and eloquent only thanks to two very important and active stock brokers. That was the name of the system back then. One who could perform procedures with material and intangible assets called a stockbroker. oldest and most active indicator activity owes its performance to two of the most prominent figures - Charles Dow Charles Henry Dow years of life from 1851 to 1902 and Edward Jones, Edward Davis Jones years of life from 1856 to 1920.
Dow was able to forever imprint his business name in the branch of financial theory and practical science, which today has come to be called the applied and technical technique of securities analysis. This was due to the fact that at the dawn of his career, Charles Dow was far from being of any practical interest either as a financial figure or as another practitioner in the field of financing. industrial enterprises. The struggle for life, earning a living for a simple guy from Connecticut cost him an unfinished school, a lack of education, an early job for a provincial newspaper, where he began to understand this life very early. It was here that he became the most highly qualified expert in stock trading. Thanks to brilliant analytical articles, his name has become a real hit in the field of applied economics and financial analytics.
A little about the work of Dow and Jones
Only in the field of statistics and analysis of stock movements in the thirties of the last century did a new name appear - Edward Jones. The general public found their newspaper deadly uninteresting and boring. It lacked funny stories from the life and work of celebrities, and spicy intriguing gossip. It was the first bulletin where every issue contained tables of fluctuations in exchange rates, many lines of figures and absolutely nothing more interesting. Articles where there was nothing interesting were devoted to the level financial condition companies that are listed on the exchange quorum of securities. The Wall Street Journal has become the main mouthpiece for what has come to be called the new financial elite of the international economic community. Here everyone found exactly the information that interested him and only in that particular period of time when the exchange game was taking place. The discovery of important and valuable analytical information has become a major breakthrough in the field of financial activity and determining the level of its effectiveness.
Index entity
If earlier everyone was interested in articles about robberies, heroic sieges of banks by police officers and predecessors federal services, then after the appearance of articles about the stock game, the financial community and stockbrokers became interested in the newspaper and the system for calculating the level of guarantees of certain shares. It has become not only a universal game for adults, but also such an accurate tool for those who play one or another that this improvement was quickly appreciated by everyone. Important and valuable has become open to small entrepreneurs and large bankers with vast experience in various systems. New York activity stock exchange became the basis for the Dow Jones index to become the most important and in demand in the field of activity of those other firms and corporations involved in manufacturing and any entrepreneurial activity. What was interesting and new was precisely the fact that an analysis of all financial movements and changes in all changes was made cash flows. It was the primary incarnation of the Dow Jones index, which was a pioneer in the field of financial activity analysis. The analysis became an independent expert assessment of the American economy as a whole, and the overall situation became understandable and predictable. The index was made as an indicator to track stock market USA, its states. At the very beginning, the index showed the average price (arithmetic) of the 12 largest US shares, i.e. each had an equal impact on the final Dow Jones index. The index still includes General Electric, an American diversified corporation that produces literally everything from the production of any equipment (cars, locomotives, turbines, etc.) to medical products. In 2011, it took 3rd place in the Forbes list of public companies, at the moment it does not lose its positions, being in the top ten.
The rest of the companies are:
- American Cotton Oil Company, currently part of Unilever Corporation
- American Tobacco Co, split into several smaller companies in 1911
- American Sugar Co, renamed Domino Foods, Inc.
- Chicago Gas Co, also has a new name - Peoples Energy Corporation
- Distilling & Cattle Feeding Co, now Millennium Chemicals
- Laclede Gas Light Co, exists under the name The Laclede Group
- North American Co, split into smaller companies in 1940
- National Lead Co, now NL Industries
- Tennessee Coal, Iron and Railroad Co, purchased by S. Steel in 1907
- S. Leather Co, ceased to exist in 1952
- U.S. Rubber Co, acquired by Michelin in 1990
At the moment, the Dow Jones index is no longer calculated for 12 companies, but takes into account the value of the shares of the 30 largest corporations in America. It is the simplest indicator to track the economic state of the US, as well as the most common. This list includes industrial, financial companies, corporations of light industry, pharmaceutical, oil and gas, etc.
If earlier the Dow Jones index was calculated as a simple average of the shares of 12 companies, now it is the so-called scaled average. It allows you to compare the index, taking into account changes in the structure of the company, its shares that are included in the index.
Below is a non-exhaustive list of companies / corporations that are included in the Dow Jones Index (the most recognizable):
Industrial companies:
- General Electric Co (the company described above), Boeing Co (an American manufacturer of aviation and space technology)
Therefore, today, as well as several decades ago, this simple and familiar indicator remains the most relevant and eloquent for analytics of the short and long term in the field of development of financial activity and entrepreneurial initiative.
Stay up to date with all important United Traders events - subscribe to our
- Economic security of the Russian Federation Political economic security of the Russian Federation
- Antimonopoly policy, its goals and methods The main direction of the antimonopoly policy of the state is
- What reforms did Witte make briefly
- Okun's law and the theory of "full employment" of the population