World barometer of the economy
The Dow Jones Industrial Average is the stock indexshares of thirty large American companies themselves. Created by the editor-in-chief of The WallStreetJournal by Charles Doe in 1884 and was initially used only for internal closed analysis.
In the realities of the modern market, the industrial index of the Dow Jones is only called a tribute to history, because the majority of the members entering into its calculation are not full participants of this detachment.
Initially, the index was calculated as an averagearithmetic between the prices of shares of all participants. Now everything is a little different. The sum of the value of all is divided into a certain divider, which constantly changes the corporation present in the company's rating split or merge. The first published index was in the late nineteenth century in 1896. It included the twelve largest industrial American companies of that time. Until now, in the index of the oldest companies are only "General Electric." The company left this elite club only in the beginning of the twentieth century for several years, and then it was a permanent participant.
After 1928, when the number of companiesthe number of participants in the index was 30, their number reached a maximum and did not change anymore. Permanent rotation implies the replacement of one or two companies, but during the severe economic shocks associated with the events that are commonly referred to as the "Great American Depression", 7-8 companies immediately flew out of the rating calculations. There were several periods when the rating participants remained unchanged for seventeen and eighteen years. There were these two periods from the beginning of the forties to the mid-seventies.
The first published rating was slightly less41 items. The first thousand was reached only in the mid-sixties. In the nineties, when the US was just a crazy industrial growth, the index reached a mark of 5 thousand, and in 1999 it was 10 thousand points. At the beginning of the two-thousandth, the growth of the index fell noticeably, especially this was noticeable immediately after the terrorist attacks in New York.
From the shortcomings of the index note that it gives onlyaverage values of the stock price without comparison with the base value, therefore the index can be compared only with another similar value. And the coverage of only 30, albeit large companies themselves, does not give a clear idea of the mood in the market.
In the quotation of the index at the moment there are such world-famous companies as Coca-Cola, Disney, Boeing, McDonald's and many others.
Despite everything, the Dow Jones index remains the oldest and most respected of all known world stock quotes, and its stable rating is one of the world barometers of economic stability.
