{"id":11307,"date":"2017-10-28T14:35:33","date_gmt":"2017-10-28T20:35:33","guid":{"rendered":"http:\/\/www.coolchecks.net\/blog\/?p=11307"},"modified":"2017-10-20T14:42:48","modified_gmt":"2017-10-20T20:42:48","slug":"understanding-the-dow-index","status":"publish","type":"post","link":"https:\/\/www.coolchecks.net\/blog\/investing-basics\/investing\/understanding-the-dow-index.html","title":{"rendered":"Understanding The Dow Index"},"content":{"rendered":"

\"Following<\/a>
Following the dow index helps keep you informed of your investments.<\/figcaption><\/figure>When the Dow Jones industrial average goes up \u2013 or down \u2013 is that cause for you to celebrate \u2013 or mourn?<\/p>\n

The Dow Index<\/h2>\n

The Dow is considered a symbol of either euphoria or despair for investors. But how much should you pin investing decisions on this fluctuating indicator of the country\u2019s financial status? This summer the Dow hit a record high, for the first time in a year, which is considered a long time in that particular measure. The reasons, according to the gurus, included an economic slump in China and Britain\u2019s vote to leave the European Union. <\/p>\n

To put such things in their proper perspective, it might be well to understand the Dow Jones index and what it means to your personal finance efforts.<\/p>\n

The index, initiated in May 1896, draws data from 30 big companies, which represent a broad selection of industries. On the list are large banks such as Goldman Sachs and JPMorgan Chase, industrial giants such as Caterpillar, Apple and Walt Disney Co. Of the original members, only General Electric remains.<\/p>\n

To put this summer\u2019s high into perspective, it didn\u2019t represent any huge change for the better: just two-tenths of a percent above the previous high. In the six months before it hit the high of May 19, 2015, it hit a record 10 times. <\/p>\n

Standard and Poor’s Index<\/h2>\n

Standard and Poor\u2019s index, by contrast, has 500 members. The two indexes differ in how they value the stocks they track. Relatively small changes in just a few of the Dow stocks can make a difference.<\/p>\n

The Dow is price-weighted, while the S&P is market-weighted. Member companies with the largest value on the stock market make the biggest impact on the index. Apple, the most valuable publicly traded company in the world at $531 billion, can move the index more than any other S&P member.<\/p>\n

So, when the Dow goes up, what will it do to your funds? Probably very little unless the rise is significant. Don\u2019t get too excited about the headline that says the \u201cDow is up\u201d until you study more closely to see how much and why. And it\u2019s the S&P average that means the most, since it has nearly 60 times more — $2.1 trillion compared with $36 billion \u2013 in its index. <\/p>\n

Funds that are managed, which might be where your dollars fit, tend to track S&P more closely. <\/p>\n

But for all its flaws, the Dow usually is right in line with the S&P. And the Dow tends to be more well recognized among investors. It offers a great at-a-glimpse of the market. As a gauge, it is safe to say then when the Dow is up, investors are up. When it\u2019s down, they are down. It pays to pay attention. <\/p>\n","protected":false},"excerpt":{"rendered":"

When the Dow Jones industrial average goes up \u2013 or down \u2013 is that cause for you to celebrate \u2013 or mourn? The Dow Index The Dow is considered a symbol of either euphoria or despair for investors. But how much should you pin investing decisions on this fluctuating indicator of the country\u2019s financial status? […]<\/p>\n","protected":false},"author":53,"featured_media":11324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[307,576],"tags":[671],"_links":{"self":[{"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/posts\/11307"}],"collection":[{"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/users\/53"}],"replies":[{"embeddable":true,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/comments?post=11307"}],"version-history":[{"count":1,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/posts\/11307\/revisions"}],"predecessor-version":[{"id":11648,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/posts\/11307\/revisions\/11648"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/media\/11324"}],"wp:attachment":[{"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/media?parent=11307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/categories?post=11307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.coolchecks.net\/blog\/wp-json\/wp\/v2\/tags?post=11307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}