Do you know what the Dow is?
The Dow Jones Industrial Average is one of the world’s most watched stock market indices that tracks how 30 large publicly traded companies are performing over the course of a trading period. This tells investors how the broad market of American industry is doing. The Dow is one of the first metrics that analysts use to gauge how the market is doing. Understanding the Dow can help you understand the market as a whole.
I created this infographic to give you some background and understanding of the Dow Jones Industrial Average.
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Understanding what the Dow Jones Industrial Average tells us about the performance of the market as a whole is key to building the foundation of knowledge necessary to approach the investing world. This index provides investors with a running portrait of the market at a macro level. In addition to providing the option to invest in the index through ETFs and options, indexes like the DJIA allow investors to time their investments and understand the performance of the market.