The Finance Watchdog: Dow Jones Industrial Average
How the Dow Jones behaves says a lot about the financial markets.
If you are curious about the stock market but unable to keep up with the heavy terminologies and huge figures, Dow Jones Industrial Average was created specifically to help you overcome those hurdles.
Dow Jones Industrial Average is an organization that was established in 1896 by Charles Dow with the sole aim of serving as a financial watchdog that gives investors an overview of the American stock market, highlighting the stock performance of the top 30 largest major-league companies in the United States of America.
The Dow Jones Industrial Average is one of the most exclusive lists known to capitalism despite the fact that it is not the most reliable way to measure the performance of the American stock market. However, it gives an average summary of the stock market outlook, letting investors know what is obtainable.
The general impression is that if the top 30 companies listed on the DJIA index are performing well financially, it is a pointer to the fact that other companies within different industries in the USA and across the globe are in a safe space financially as well. This is also applicable in reverse.
The calculation of the index of the Dow Jones Industrial Average is carried out by using the Dow Divisor and it assists with ascertaining how a one-point movement could affect the placement of the 30 corporations that have been listed. According to the Wall Street Journal, the current Dow Divisor is 0.14748071991788.
The Dow Jones Industrial Average is appraised from time to time in order to remove corporations that no longer fit the listing standards and replace them with those that do. Some of the listing standards include being incorporated and headquartered in the United States of America, having a healthy number of investors, a great reputation, and more.
As of today, some of the companies on the Dow 30 are Chevron, Goldman Sachs, Disney, Microsoft, Visa, Nike, Procter and Gamble, Coca-Cola, Apple, Walmart, McDonald’s, and others.
The Dow Jones Industrial Average index is highly recommended for a preexisting or prospective investor who desires to invest in the most successful firms in the USA because it enables easy surveillance of your targeted company’s stock market performance without having to consume information about other companies you are not interested in.
