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The Dow Jones Industrial Average Index

The Dow Jones Industrial Average Index. Brief History. The Dow Jones Index was founded by Edward Davis Jones , Charles Henry Dow and Charles Milford Bergstresser. Brief History.

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The Dow Jones Industrial Average Index

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  1. The Dow Jones Industrial Average Index

  2. Brief History • The Dow Jones Index was founded by Edward Davis Jones, Charles Henry Dow and Charles Milford Bergstresser.

  3. Brief History • Charles H.Dow first unveiled his industrial stock average on May 26, 1896, at this time the stock market was not highly regarded. Prudent investors bought bonds, which paid predictable amounts of interest and were backed by real machinery. The Index brought about a great change in the way people regarded the stock market.

  4. Brief History • Charles Dow devised his stock average method for everyday people to be able to discern whether stocks were rising, falling or treading water. • He compared his average to placing sticks in the beach sand to determine, wave after successive wave, whether the tide was coming in or going out. If the average's peaks and troughs rose progressively higher, then a bull market prevailed; if the peaks and troughs dropped lower and lower, a bear market was on.

  5. Brief History • Daily publication of the Dow Jones Index in The Wall Street Journal began on Oct. 7, 1896. • The Dow Jones Industrial Average now consists of 30 stocks. Their stocks are widely held by individuals and institutional investors. The DJIA accounts for approximately 23.8% of the total U.S.

  6. Company Structure • Dow Jones & Company is a subsidiary of News Corporation and a leading provider of of global business news and information services. • It is an organization of more than 7,000 full-time employees and composed of four essential segments.

  7. Company’s Four segments • Consumer Media Group: The Wall Street Journal, Barron's, MarketWatch and the Far Eastern Economic Review. • Enterprise Media Group: Dow Jones Indexes, Dow Jones Financial Information services. • Local Media Group: coast-to-coast group which publishes eight daily and 14 weekly community newspapers. • Strategic Alliances: Smart Money, Vedomosti, Stoxx

  8. Why is the DJIA so reliable? • A stock typically is added only if it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the sector(s) covered by the average. • The Dow Jones Industrial average is maintained and reviewed by editors of The Wall Street Journal. • The Dow Jones Industrial Average is the most-quoted market indicator in newspapers, on TV and on the Internet and as such has gained popularity through word of mouth. • It is discernable by most people • It reliably indicates the market's basic trend.

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