A:

The best place to find a list of all thirty stocks included in the Dow Jones Industrial Average (DJIA) is the "Historical Components List" published on the official DJIA website. This fascinating list, which shows every change in the index since its creation in 1884, is updated every time as stock is added or deleted.

The DJIA, considered by many to be the gold standard of market indicators, is comprised of some of the largest and most well-known companies in the United States. Due to the diversity of stocks in the index, many economists consider the DJIA to be a strong indicator of the overall strength of the U.S. economy, not just the investments market.

Unlike the market-weighted S&P 500 index, probably the second-most watched indicator, the Dow Jones Industrial Average is a price-weighted index. Thus, the DJIA is calculated theoretically by totaling the prices of one share of each component stock and dividing by thirty. However, the current divisor now equals a fraction of 1% due to years of adjustments for stock splits, mergers and the like. The price-weighted method arguably gives a more accurate representation of the movement of the overall market because it is not influenced by the number of shares each company has outstanding.

(For more on this topic, read Dow Jones Industrial Average History.)

This question was answered by Ken Clark.

RELATED FAQS

  1. Is there a difference between financial spread betting and arbitrage?

    Find out more about financial spread betting, arbitrage and the differences between financial spread betting and the arbitrage ...
  2. How do I place an order to buy or sell shares?

    Read a brief overview of how to open a brokerage account, how to buy and sell stock, and the different kinds of trade orders ...
  3. Why would a corporation issue convertible bonds?

    Discover how corporations issue convertible bonds to take advantage of much lower interest rates as a result of a conversion ...
  4. What does a high turnover ratio signify for an investment fund?

    Find out more about the turnover ratio, what the turnover ratio measures and what a high turnover ratio indicates about an ...
Related Articles
  1. Mutual Funds & ETFs

    The 5 Biggest ETF Companies

  2. Trading Strategies

    Microsoft's Game of Catch-Up With The Dow

  3. Active Trading Fundamentals

    Is there a difference between financial spread betting and arbitrage?

  4. Fundamental Analysis

    What does a high turnover ratio signify for an investment fund?

  5. Options & Futures

    How does a forward contract differ from a call option?

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  3. Bid Wanted

    An announcement by an investor who holds a security that he or ...
  4. Float Shrink

    A reduction in the number of a publicly traded company’s shares ...
  5. Capital Strike

    A refusal of businesses to invest in a particular sector of the ...
  6. Gray Market

    An unofficial market where securities are traded. Gray (or “grey”) ...

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!