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What is the Dow Jones Stock Exchange (WallStreetWindow)

Submitted by Mike Swanson on Thu, 2009-08-13 10:01.

When you think of the Dow Jones Stock Exchange you are probably thinking about the most popular and widely followed index of stocks. The Dow Jones Industrial average tracks a basket of the thirty largest companies that trade on the New York Stock Exchange.

There really isn't a "Dow Jones Stock Exchange" in the sense of a place where Dow Jones stocks exclusively trade, because all Dow Jones stocks trade on the New York Stock Exchange, home to more than 2,8000 companies that trade over a billion share every single day.

The Dow Jones Industrial Average is probably what you are thinking of when you typed in "Dow Jones Stock Exchange." The DOW average - or DOW 30 - consists of 30 stocks.

It was created by the editor of the Wall Street Journal named Charles Dow back in the late 1800's.

It is the second oldest market index after the Dow Jones Transportation Average which at first consisted of mainly railroad stocks.

The Dow Jones Industrial Average is computed by taking the price of the 30 largest public companies in the United States. Not all of the mare in heavy industry. Some are banks and some are computer companies like Microsft and Intel - but all are the biggest companies in the United States and even in the world.

McDonald's for instance is in the DOW and so is Wal-Mart.

The industrial name comes from history when the DOW 30 average was first made every company on it had something to do with industry or manufacturing. Most were conglomerates.

Companies are often added and dropped from the DOW as they change in size. In June, 2009 for example GM and Citigroup got dropped and replaced by The Travelers Companies and Cisco systems.

Many fortunes have been made by investing in the DOW 30 stocks. Personally I trade and invest for a living and have done well in a lot of them. There are some great low risk and high reward trading strategies that are simply for anyone to implement.

If you are interested in making money in the stock market check out my free stock trading guide. It's completely free and once you get it you will know so much about how the stock market works you'll be shocked by how much you learn.

To begin click here.



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