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Finance: What is the Dow Jones Industrial Average? 2710 Views

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Description:

What is the Dow Jones Industrial Average? The Dow Jones Industrial Average is usually just called the Dow. It’s an average of 30 of the most well-known and influential stocks. Using these stocks, it determines how the market is performing overall.

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Transcript

00:00
finance a la shmoop- what is the Dow Jones Industrial Average? well it's just
00:08
an index. it's a basket of 30 industrial stocks hence the catchy industrial word [list of the 30 stocks involved in the Dow]
00:14
in there and it was started in 1896 by Charles Dow and Edward Jones sort of the
00:18
Coke and Pepsi of stock averages in the day .worth noting is the fact that while
00:22
the Dow average is quoted often in the press it's not something that real Wall

00:27
Street traders really rely on that much as a market place holder anymore. why?
00:31
well because the Dow comprises only 30 stocks. it isn't really a broad market [Dow Jones in the trash]
00:37
representation, and you know the way the S&P 500 is the 500 is bigger than 30. Big
00:43
Brother has way more stocks and is thus way more liquid than the relatively
00:48
blippi set of 30 stocks that the Dow offers. over time the Dow has changed as
00:53
companies were bought and/or died and or just withered and became no longer
00:57
relevant. i.e. newspaper industry. which means that this thing has gone through
01:02
more faces than Kanye West .yeah. [Kanye West faces pictured]
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