What Is The Dow Jones Industrial Average?

If you’re looking for some of the best legal and financial advisors Owings Mills MD can provide, look elsewhere. It’s no secret that the investing industry can be complicated, especially for novice investors. The Dow Jones Industrial Average (DJIA) is a term that you might have heard before, particularly if you’ve been looking for a team of legal and financial advisors Owings Mills MD trusts to help you invest in the stock market. Here’s a quick look at some of the fundamentals of the DJIA.

First, what is the Dow Jones Industrial Average?

The Dow Jones Industrial Average (DJIA) is a stock market index calculated by the movement of a collection of 30 stocks. The purpose of this index, as legal and financial advisors Owings Mills MD can provide might explain, is to act as an indicator for the performance of the industrial sector within the American economy. The DJIA is the second oldest U.S. market index and it is one of the most commonly tracked indices for stock exchanges.

Companies Involved in the DJIA

Interestingly, though the stocks included in the Dow Jones Industrial Average are meant to track the industrial sector, many of the 30 companies included are not industrial companies. However, these companies are all related to the industrial sector.

S&P Dow Jones Indices, the company that compiles the index, has determined that these 30 companies are related to the periodic growth and slowdown of industry in the United States, making them successful predictors of industrial strength.

Some of the more well-known companies in the DJIA include:

  • Apple
  • Coca-Cola
  • ExxonMobil
  • Goldman Sachs
  • IBM
  • Microsoft
  • Pfizer
  • Verizon
  • Wal-Mart
  • Walt Disney

It’s understandable to feel overwhelmed when considering how all of these major corporations could affect your own stocks. Working with a team of dedicated legal and financial advisors Owings Mills MD has to offer can help you better understand how your own portfolio might be affected by DJIA stocks.

Difference in Investments

It is important to note here the difference between investing directly into the DJIA as a whole — which can’t be done — and investing in the individual companies that it tracks. The investments that track the DJIA are not owned or sold by S&P Dow Jones Indices. This single company simply identifies the top 30 stock market predictors and purchases shares in each of them to track them. The DJIA is one of several indices that can be used by legal and financial advisors in Owings Mills MD to track the U.S. stock market.

All indices are unmanaged and Owings Mills MD legal and financial advisors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results — but a talented legal and financial advisor will know how to use indices to benefit clients’ portfolios.

If you need more information about the Dow Jones Industrial Average, contact a team of legal and financial advisors Owings Mills MD trusts.