How long has djia existed

HD Honeywell International Inc. PG Salesforce. VZ Visa Inc. WBA Walmart Inc. The DJIA is a price-weighted index. This means that the Dow gives more weighting to companies with more expensive stock.

The difference in how the Dow weights its index can lead it to have more short-term ups and downs than market-cap-based indexes. The Dow is one of a few equity indexes used to measure and understand the performance of the U.

Price drops that are small percentages of share prices may have outsize impacts on the Dow in companies with smaller market caps but expensive shares. Stocks must meet certain requirements to be included, such as maintaining a minimum daily trading volume of , shares and having been traded on the NASDAQ for at least two years. Keep in mind, though, that its strong returns are in large part due to the amount of tech stocks it holds.

Because its components are among the biggest public companies, the DJIA can be a a proxy for the performance of the overall U. Many investors choose index funds that are based on the Dow. When you buy a single share of a DJIA index fund, your portfolio gets exposure to all 30 of the Dow components. This gives you easy exposure to companies that have a proven track record of returns and solid business practices. Kat Tretina is a freelance writer based in Orlando, FL.

At that time, the index followed the 12 largest companies in each sector of the U. The first published value of the Dow Jones, The index was a way for Dow and Jones to report the overall health of the stock market to investors.

Later, the company published The Wall Street Journal. Companies often withheld or skewed certain information, leaving investors skeptical and timid. The Dow Jones Industrial Average was, therefore, necessary to build rapport for the stock market with investors. The 12 original companies that represented every segment of the market at the time, except railroads and transportation, were as follows:.

The Library of Congress. The Wall Street Journal. Accessed Oct. US Markets. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. The observations for the Dow Jones Industrial Average represent the daily index value at market close. The market typically closes at 4 PM ET, except for holidays when it sometimes closes early. Originally, the index was made up of 12 stocks, it now contains 30 component companies in various industries. See indexology for more information.

All rights reserved. More contact details are available here , including phone numbers for all regional offices. Your trusted data source since Like any observer, Dow saw that many or most stocks tended to move like a wave in the same direction from day to day as investors reacted to events and expectations.

He sought to put a number on that daily movement. Dow chose 12 of the biggest and most influential corporations of the day. Each was a giant in its sector, and most reflected demand for the raw materials that fed the American economy, like coal, sugar, and oil. At the close of every trading day, he added up all of their stock prices and divided by That was the Dow Jones Industrial Average. The timing was auspicious. The United States was emerging from a recession caused by the collapse in of Philadelphia and Reading Railroads.

Even with trouble in the railroad industry, economic activity was booming. Coal remained the dominant fuel for transportation, while gas and electricity were in demand.

Crops were a major export, while also providing sustenance to Americans. As the country's industrial age came to a close, electricity became the dominant energy source and led to numerous technological advancements that were embraced by consumers.

The economy shifted toward providing more consumer goods and technology-based services and products. Most of the original companies in the DJIA were removed from the list long before they went out of business. Then and now, the list of Dow components is revised periodically to remove companies that can no longer be seen as bellwethers and to substitute companies that have climbed to prominence.

In , the Dow was expanded to include 30 companies. These companies have changed over the years, but the index still aims to represent the U. The following are the first 30 Dow stocks, following the expansion:.