What is the Dow Jones Index

Securities trading has become a part of the global economy and influences the development of events. The economic situation can be analyzed by the way the quotations of the trading leaders’ assets change.

To understand the mood of the market, it is enough to follow groups of companies, or rather the movement of their securities. Issuers are grouped by industry, asset value, capitalization, country, and other indicators. Then, using a specific calculation method, the total value of shares is brought to a single value — the index.

Dow Jones index current price is important, if only because it is the first of its kind. It is controversial and has many questions, but everyone is watching it. The indicator was created by Charles Dow and Edward Jones, partners and founders of the famous Wall Street Journal newspaper, in 1896. Thus, the Dow Jones indicator, the name of which consists of two last names, is more than a hundred years old.

How the Dow Jones Index is calculated: eBay stock prices today, and other companies.

Now let’s talk about the points, which are now more or less. You can’t just take, add up the value of all the securities, assets, and say, here’s our index. It doesn’t tell you anything. Nor does it give a general understanding of the market by analyzing eBay stock price history.

The Dow Jones was originally calculated by a simple formula. We had to add the price of one share of all issuers and divide by 12, exactly as many companies were in the first composition. The result was the average value, which was the index at the time of calculation. Comparison with previous indices told us whether the value was rising or falling. The picture was spoiled by company mergers, splits, takeovers, and other processes.

The formula was changed. Now the final value is divided by the coefficient. The coefficient itself is a dynamic indicator; its value changes depending on the actions of issuers. In any case, we already see on the charts the total value of the Dow Jones, which is expressed in dollars. It can be found here.

The method of calculation is criticized for being based on stock value, not on the market value of the companies themselves; i.e., capitalization. Therefore, the most expensive issuers on the list do not affect the indicators any more than the lagging ones. At the same time, a collapse in the securities of a major player would fold the Dow Jones value in half.

This was the case, for example, with Boeing in 2020. At a time when the market was down 30% on average, Boeing lost about 50% of its securities value and “dragged” the entire index with it. Such global events are even reflected in the current stock price of eBay.

Dow Jones Index Returns: DIS stock prices and other companies

Is the Dow Jones stock worth buying? We can’t give a definite answer, but here are the numbers to analyze. The previous chart shows that the Dow Jones rose before the coronavirus pandemic, collapsed, and then went back up. Also available on the S&P Dow Jones Indices website is a chart of quotes over the past 10 years.

How to invest

For those who have decided to buy Dow Jones stocks, here are the easiest ways to do so.

Buy one stock at a time

If you buy one stock at a time from the Dow Jones lineup, it will be assembled in your portfolio. Given that there are only 30 companies, this is quite possible. Other than that, you are free to choose only the most profitable assets from the entire lineup. You can look at eBay after hours stock prices as well as other companies to draw your conclusion.

Buy Dow Jones through ETFs

Exchange-traded funds (ETFs) are a ready-made basket of stocks from an index. In our case, the composition of the fund’s securities completely replicates that of the Dow Jones. When you buy shares of a fund, you also become the owner of the securities included in it.

The Dow Jones stock index shows an investor the U.S. market reaction to the current world situation, makes DIS stock price predictions, and also allows predictions of future events.

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