Tuesday, 25 June 2019


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Dow Jones

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Stock market index of the New York Stock Exchange. It is the most famous stock market index in the world and encompasses the actions of 30 major industrial companies traded on Wall Street. There is also a Dow Jones index of utility companies and other transportation companies. The reason why so much attention has been given is because it is the grandfather or the great father of the stock indices. It is much more than any other indicator of Wall Street and the world, the Dow has become a clear synonym for "bag", and already is part of the landscape of the conversations of everyone from taxi drivers to Chairmen of large corporations. In fact, the Dow comprises just 30 actions, over a universe of about 10,000 companies listed. For this and other reasons, the Dow has been watched many times over the years as an obsolete index and an unreliable barometer of trends of investors. And the reason for this is their age. More than 100 years is, by far, the most ancient and renowned of the stock indexes around the world.

HISTORY The birth of the Dow Jones Industrial Average was due to the initiative of Charles Henry Dow (1851-1902) and Edward D. Jones (1856-1920). Both journalists, along with Charles Bergstresser, founded in 1882 Dow Jones & Company, a financial news service, two years later, launched the first index quotes New York Stock Exchange. After 12 fruitless years of countless experiments and own notes on companies, which were published by famed financial newspaper "The Wall Street Journal," which was editor Charles Dow, the original objective being the establishment of a "barometer "gauge of economic activity, and not the trend analysis of the values, application for which has won deserved reputation over the years. We centre for the moment the primary focus research initially led Dow (weighting of economic activity through the development of certain sectors in the stock market), starting observations can be summarized into two:

  1. When the economy through a period of boom. industrial enterprises experience a productive expansion and increase their benefit levels. As a result all acquire a greater attraction for investors, increases the demand for titles of these societies and their stock price begins to progress.
  2. As the industry moves forward in its expansion, increases the demand for transportation services and thus increases the benefits of the transport companies. As in the case of industrial societies, this positive development would attract investors who would influence your buying activity in the recovery of stock prices in the transport sector.

So that these two assertions could have a practical application Charles Dow established  two averages or sectoral indices: an industrial index (Dow Jones Industrial Average) and an index of transport (Dow Jones Transportation Average). Originally Dow industrial index (DJIA) included 12 securities of different industries. This number increased in 1916 to 20, to be finally fixed at 30 from 1928. 

The Dow Jones street-level news ticker as seen in Times Square, New York City

The Dow Jones street-level news ticker as seen in Times Square, New York City - Image: Wikimedia.org - Author: ProducerMatthew[/caption]

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Erick Gálvez
Author: Erick GálvezWebsite: http://www.asdforex..comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
ASDForex manager and professional trader since 2008. I am also Aleforex.com manager where you can view the services that I give
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