Dow Jones Industrial Average (DJIA)
Categories: Trading, Investing, Index Funds
It’s just an index. A basket of 30 industrial stocks...hence the catchy "industrial" word in there.
It was started in 1896 by Charles Dow and Edward Jones…sort of the Coke and Pepsi of stock averages in those days. Worth noting is the fact that, while the Dow Average is quoted often in the press, it’s not something that real Wall Street traders rely on that much as a market placeholder.
Why? Because the Dow comprises only 30 stocks. It isn’t really a broad market representation the way the S&P 500 is. Big Brother has way more stocks and is thus way more liquid than the relatively blippy set of 30 stocks that the Dow offers.
Over time, the Dow has changed, as companies were bought and/or died and/or just withered and became no longer relevant…which means that this thing has gone through more phases than Kanye West.