How Reliable is the Dow Jones Industrial Average?
Dow trading, or trading on the stock market by relying on the Dow Jones Industrial Average, has had its supporters and its critics. The Dow Jones has been around since the 1800s and has influenced almost all aspects of the financial markets, including day trading, overnight trading, option trading and other forms of investments. To get a better understanding of how this philosophy works, read on. What is the Dow Jones? The Dow Jones Industrial Average, or simply the Dow, is one of the types of stock market indices that gauge the performance of the industrial sector of the United States stock market. It was developed by Charles Dow, former editor of the “Wall Street Journal.” The Dow average is made up of 30 of the largest (and supposedly) most influential public companies in the U.S. It is calculated by summing up the prices of the 30 companies’ stocks, with the product divided by the Dow Divisor or the number of component companies. In cases of splits, spin-offs or other structural ch
