he Dow Jones is a stock index consisting of the 30 most powerful companies on the New York Stock Exchange , with the exception of transportation and public services.
It is not the official index of it (called NYSE Composite ), but it is the most prestigious in monitoring this market , the main one in the country.
They are prepared by the company Dow Jones Indixes, LLC. and they are made up of a variety of specific stock indexes, created by American journalists Charles Dow and Edward Jones in 1882, also founding that year, their company. Dow was at that time, the editor of the New York newspaper The Wall Street Journal .
Initially, the index only grouped the 12 strongest companies of the moment, going to 20 in 1916 and as a last extension to 30 companies in 1928. Therefore, it is undoubtedly the oldest stock index in the world . The only company that has remained in the index since its creation is General Electric .
Since 2007, Dow Jones & Company Inc. was absorbed by News Corp. , editors of The Wall Street Journal , who are commissioned to make changes to the composition of this stock index. The Dow Jones is followed closely every day by a large number of investors, analysts, economists and politicians because of its accuracy as a market indicator.
It should be noted that the Dow Jones is an indicator of the stock market and does not represent much less a return on the market or the general economy of the United States.
How to calculate the Dow Jones stock index?
To carry out this operation, the prices of the shares of all 30 companies must be added , to then divide this total by a variable divisor that is modified periodically.
Below you can see a graph with the evolution of the American index from the year 1896, when it was around 30 points, until 2015, the year in which it has exceeded 18,000 points. That is, if we had invested $ 30 in Dow Jones in 1896, we would now have $ 18,000.