Like many people, I trick myself into thinking I know what certain things are. Simply having heard a term floated around a particular discourse doesn’t actually meant I know what it is. So, I invested some time into it, and here are my findings.
What Actually is it?
Firstly, a distinction must be made. The Dow Jones is different to the Dow Jones Industrial Average (DJIA). The Dow Jones is the umbrella company that created a product called the DJIA or, however, in news and media, the DJIA is often referred to as the Dow Jones or the Dow – or sometimes the Dow 30. ‘The product’ the Dow Jones is an index of large or ‘Significant’ American companies or ‘stocks’. These are large firms which cumulatively represent the American stock market. As these are the largest entities in the stock market, how they perform is a good indicator to how the stock market is performing as a whole. And thus, how the economy is performing as a whole.
The above was a little confusing so perhaps the a history lesson will waft some sense into what we are talking about. The Dow Jones was company created in the 1896 by Charles Dow, Edward T. Jones and Charles Bergstresser. The company has three products to its name: The Wall Street Journal, Dow Jones Newswires and the Dow Jones Industrial Average. In 1897, the men officially launched the Dow Jones Industrial Average (DJIA).
These three dudes made this financial index to see how stocks or companies perform within in their country. Here are the three dudes in question…
Edward T. Jones
List of Companies in the Dow
The Home Depot
Johnson & Johnson
Procter & Gamble