Unlike the S&P 500 and the Nasdaq, the Dow weights stocks by price rather than by market capitalization derived by multiplying share prices by the number of shares outstanding. Given that it only includes 30 large capitalization U.S. companies, the Dow index arguably doesn’t reflect the U.S. economy as well as another popular index, the S&P 500, which includes 500 U.S. companies. Furthermore, since the Dow index is a price weighted index, stocks with higher stock prices have more influence on the index regardless of their market cap. Price weighted indexes are also affected by stock splits while market cap weighted indexes are not. For example, despite General Electric’s (GE -0.77%) pretty hefty market cap, its amazingly long run in the Dow came to an end in June 2018.<\/p>\n
The Dow Jones Industrial Average (the Dow) is an index of the 30 top-performing U.S. companies. The most recent all-time-high record (as of this writing) was on Jan. 4, 2022, when it closed at 36,799.65. Originally the The Dow Jones Industrial Average comprised of only 12 companies, mainly with operations in oil and gas, sugar, tobacco and railroads. Now the index includes 30 companies, with companies operating in many different sectors including technology.<\/p>\n
As it did before, the companies listed on the Dow today are among the leaders in their core fields. Companies in the DJIA are also chosen by a committee and are balanced to try to represent the state of the overall economy. This means that certain companies may be added to or deleted from the index periodically without much in the way of being able to predict when or which stock will be changed. Despite its limitations, however, the Dow still holds a special place in American finance. Individuals can invest in the Dow, which would mean gaining exposure to all of the companies listed in it, through exchange-traded funds (ETFs), such as the SPDR Dow Jones Industrial Average ETF (DIA).<\/p>\n
As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors. Goldman Sachs strategists broke down the impact of global elections on economic growth, monetary policy, and financial markets. Salesforce has been the leader in customer relationship management (CRM) software for 10 consecutive years, and the CRM market is forecast to grow by 14% annually through 2030. Similarly, Microsoft is the leader in enterprise software-as-a-service and operates the second-largest cloud computing platform; those markets are also projected to grow by 14% annually through the end of the decade.<\/p>\n
Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA\/SIPC. You may check the background of these firms by visiting FINRA’s BrokerCheck. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. References to institutional trader<\/a> any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any strategy managed by Titan.<\/p>\n The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor, which is approximately 0.152 as of November 20212009 Recession<\/h2>\n