Probably the most closely followed index in the stock market today is the Dow Jones Industrial Average. Talk to anyone about the stock market today and they will more than likely name the DJIA as an important instrument. Which is interesting since many people do not really know what it is or what it should do. Unless you're already involved in the stock market you probably only know it by name. Still, understanding the Dow Stock Market Data today is essential to the success of many investors.
The Structure:
The Dow is one of the oldest stock market indexes in the US. Created in 1896, the index was set up to give an overall picture of how the stock market was performing at any given time. Initially set up with 30 blue-chip companies, today's Dow is comprised of Industrial businesses (20.41%), Consumer Services (16.36%), Technology Companies (15.58%), Health Care Services (11.45%), Financial Services (11.13%), Oil & Gas Industries 10.92%), Consumer Goods (6.16%), Telecommunications (4.73%), and Basic Materials (3.26%).
The index was structured to show diversity in the market. But its diversity goes beyond different types of industries. Unlike the first Dow index, the Dow Stock Market Data today is further diversified by the many multinational operations and how they perform on the international stage.
Risk And Volatility:
To analyze the Dow's performance today, it is important to understand that not all can agree on its volatility. For this reason, many investment professionals are not inclined to recommend products that are tracked by the Dow. That being said, the businesses themselves are considered a low risk investment opportunity. Because the Dow has been set up to represent well-established companies in the world, it is highly unlikely that any investment in them will fail because they are the least likely companies to go defunct. That doesn't mean that the prices of their companies will not fluctuate over short periods of time.
Advantages Of Investing Based On The Dow:
One of the main advantages of investing in the Dow is its history. The index is well over one hundred years old and still it is one of the first indexes people will turn to when they want to build their wealth.
Disadvantages:
The Dow Jones still uses only 30 companies to reflect the performance of thousands. This means it doesn't even come close to showing an accurate picture of the market. Many people prefer to use other more up to date indexes like the S&P 500 as a measure of how the market is performing.
If you are interested in learning more about the Dow Stock Market Data today, it is more important than ever to do your homework. Your choice to use the Dow as a guide will depend largely on the type of investing you want to do and how much of a risk you are willing to take. Because the Dow is not considered a platform for high-risk investors those who prefer safety to potential will continue to flock to it.