First, let’s review how the Dow Jones stock market index works. The index consists of 30 large companies from around the world, representing various industries and countries.
These companies are listed on the New York Stock Exchange (NYSE), which means that if you want to purchase any of these companies’ stocks, you’ll need to trade through an NYSE broker such as Fidelity Investments or TD Ameritrade.
The index itself is composed of price-weighted stocks, so each company has an equal chance of contributing to the overall change in the index regardless of its total market value or its individual price movement.
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Basic Facts about the DJIA
The Dow Jones Industrial Average commonly referred to as the Dow or the Dow Jones is an American stock market index based on the price of 30 large public companies.
The average is calculated by dividing their combined stock prices by a divisor, which in turn is adjusted so that it always reflects a value of 20.
In other words, each new addition to and deletion from The Dow takes into account changes in a company’s market capitalization; if one company’s share price rises too high (or falls too low), its place among DJIA members may be replaced with another company whose share price has stayed within range.
How to trade in the DJIA
To trade in stocks on your own, you need to open a stock trading account with a broker. The broker connects you to an exchange where you buy and sell stocks.
Most brokers offer two types of trading accounts—one that lets you trade online (via your computer or smartphone) and one that requires you to talk to a broker over the phone or in person.
You can place stock trades yourself from your account or have someone else handle it for you; either way, know what charges are associated with each type of account before opening one.
Information about the current Dow Jones companies
There are 30 stocks that makeup what is known as The Dow. The stocks are split between 3 different market indexes: The Industrial Average, which includes companies in blue-chip industries like automobile, chemicals, and construction.
The Transportation Average consists of transportation companies like UPS and railroads, and The Utility Average is made up of electric companies. Additionally, there is a fourth index called The Dividend Aristocrats (not a stock index but instead an elite group of large-cap stocks), with only 51 spots available.
Companies get into that list when they have raised their dividend payments for 25 years straight. Each individual company’s portion of each index varies with their total share prices.
How do I invest?
When you decide to start investing for your future, it can be a difficult and complicated process. Make sure you have all of your questions answered before putting any money down.
Whether you’re starting off with $100 or $100,000, there are some general things to consider when getting started: What is my overall financial situation? What are my short-term and long-term goals? How much time do I have to invest and manage my portfolio?
Once you’ve identified these points, you can proceed with finding an investment plan that will help meet your needs. Here are some basic tips: Start small – If you don’t have much in savings, it may be best to start out small until you get a better handle on how investing works.
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