The Dow Jones Industrial Average is a stock index of the stocks of thirty large American companies themselves. Created by Charles Dow, editor-in-chief of The WallStreetJournal, in 1884, it was originally used only for internal, closed analysis.
In the realities of the modern market, the Dow Jones industrial index is called only paying tribute to history, because most of the members included in its calculation are not full participants in this squad.
Initially, the index was calculated as the arithmetic mean between the stock prices of all participants. Now everything is a little different. The sum of the value of all is divided by a certain divisor, which constantly changes the Korg; the companies present in the rating are split up or merged. The index was first published at the end of the nineteenth century in 1896. It included the twelve largest industrial American companies of that time. To this day, only the General Electric has remained in the index of the oldest companies. The company left this elite club only at the beginning of the twentieth century for several years, and after that it was a permanent member of it.
After 1928, when the number of companies participating in the index became 30, their number reached a maximum and did not change anymore. The constant rotation implies the replacement of one or two companies, but during the severe economic upheavals associated with the events, which are commonly called the “Great American Depression,” 7-8 companies immediately flew out of the rating. There were several periods when the participants of the rating remained unchanged for seventeen and eighteen years. These two periods were from the beginning of the forties to the mid-seventies.
The first published rating was just under 41 points. The first thousand was reached only in the mid-sixties. In the nineties, when the USA was just crazy industrial growth, the index reached from the mark of 5 thousand, and in 1999 already 10 thousand points. At the beginning of the two thousandth, the growth of the index fell noticeably, this was especially noticeable immediately after the attacks in New York.
Among the shortcomings of the index, it is noted that it gives only average values of the stock price without comparison with the base value, therefore the index can only be compared with another similar value. And the coverage of only 30, even large companies themselves, does not give a clear idea of market sentiment.
The quotes of the index currently contain such world-famous companies as Coca-Cola, Disney, Boeing, McDonald's and many others.
Despite everything, the Dow Jones index remains the oldest and most respected of all known world stock quotes, and its stable rating is one of the world barometers of economic stability.