The Dow Jones is also referred to as the Dow Jones Industrial Average (DJIA), Dow 30, industrial average, or Dow. Approximately two thirds of the Dow 30 is made up of companies that manufacture industrial and consumer goods, while the rest of the index is a diverse mix of companies from other sectors. It was founded in 1896 by Charles Dow, and represented the dollar averages for twelve stocks from the leading American industries. Back in those days, investors mainly bought bonds as the stock market was not highly regarded.
In the stock market today, it is common place for investors to buy stocks as investment vehicles. In the old days, trading stocks was reserved for the rich and powerful. Today’s investors come from all parts of society. With the help of new technologies and enhanced communications, investors can access the Dow Jones and stock pick for themselves. Many people use the markets as a way to earn extra capital. Nowadays, with so much information available, it is not uncommon to find investors performing their own technical analysis of stocks. While many go it alone, there are still others that prefer to enlist the services of a broker.
A full service broker will provide investors with stock tips and will help with stock picking for their client’s portfolio. They have access to stock charts and other tools to help forecast how the Dow Jones or stocks may move. In the old days, investors did not have a clear view of the day to day movement of the market. They could not see if the markets were rising or falling, and could not forecast trends. It is hard to imagine how investing in those days was, compared with all the technical indicators and theories available today.
Initially the Dow Jones started with a 12-stock industrial average, and in 1916, expanded to a 20 stock industrial average. In 1928, it rose again to a 30, where it remains today. The Dow has changed its components 48 times, and each time a company is replaced with another, adjustments are made to the scale factor used in calculating the index so that the value of the average remains the same. The Dow has become the most quoted market indicator from stock market videos, to newspapers, television, and now the internet as well. It is the most well known stock exchange among investors.[/fusion_text]