Five Questions About the Dow Jones

dow jones

You might have heard of the Dow Jones and wondered what it is all about. This stock market index represents 30 of the largest and most important companies in the United States. It has long been regarded as an indicator of the state of the economy and is a popular place to invest money. However, it is not something you should rush into. If you want to understand what it is all about, consider these five questions:

Who is behind the Dow? There are many critics who say that the Dow is a poor representation of the stock market and fails to take into account market capitalization. Many analysts also prefer the S&P 500. In fact, TheStreet’s Eric Jhonsa believes that the inclusion of Salesforce in 2020 is another example of the arbitrary index mechanics. Regardless of the critics’ point, it is still important to understand the history of the Dow.

When considering investments, it is important to know that the Dow Jones Industrial Average has weathered recessions, depressions, bubbles, and expansions, and has survived two world wars. The index is often quoted from Wall Street to Main Street. Ultimately, investors should look to a reliable stock market indicator such as the Dow Jones Industrial Average. You will be able to determine the strength of the U.S. economy based on the Dow Jones and the S&P 500.