Bellwether Stock

  

Categories: Metrics, Stocks, Bonds, Trading

A stock that indicates where the market is heading. Think Les Mis' "Master of the House."

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Finance: What is the Dow Jones Industria...2710 Views

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finance a la shmoop- what is the Dow Jones Industrial Average? well it's just

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an index. it's a basket of 30 industrial stocks hence the catchy industrial word [list of the 30 stocks involved in the Dow]

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in there and it was started in 1896 by Charles Dow and Edward Jones sort of the

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Coke and Pepsi of stock averages in the day .worth noting is the fact that while

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the Dow average is quoted often in the press it's not something that real Wall

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Street traders really rely on that much as a market place holder anymore. why?

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well because the Dow comprises only 30 stocks. it isn't really a broad market [Dow Jones in the trash]

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representation, and you know the way the S&P 500 is the 500 is bigger than 30. Big

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Brother has way more stocks and is thus way more liquid than the relatively

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blippi set of 30 stocks that the Dow offers. over time the Dow has changed as

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companies were bought and/or died and or just withered and became no longer

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relevant. i.e. newspaper industry. which means that this thing has gone through

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more faces than Kanye West .yeah. [Kanye West faces pictured]

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