Dow Jones Industrial Average (DJIA) is one of the most important indexes today, not only in America, but in the whole World. It’s a reliable indicator for stock market sentiment and is used by lots of analysts, traders, companies and investors from around the globe every day. That’s why I created this site, whereeveryone interested in the index will be able to find some essential Dow Jones information, like charts, quotes news and analyses.
On the following Dow Jones chart you should be able to see the exact price of the index and its price movement for today. You can refresh the chart by refreshing the page or pressing the “F5″ button on your keyboard.
You see the Dow Jones’ chart for today with the help of YAHOO FINANCE
In this site you can find some more great stuff about this popular American stock index (DJIA).
Here are some of our main sections:
Find here some different types of Dow charts, longer term Dow charts (since its creation and before), real time charts and many more. Here you can also see some comparative charts and price action analysis, based on the previous movements of the index. See the big picture – how the benchmark has performed for the last 200 years, its deviations for this period, crashes and rises.
Read about the history of the index, and how it happened to exist. Here you can find a brief history of Dow Jones, some historical facts and basic information about the benchmark, like what it really measures, how and so on.
Some of the latest today’s’ economic news, from several authority sources around the globe, about Dow Jones Index. In this streaming news section we collect the latest headlines from some of the world’s major sources like The Wall Street Journal, CNN, Bloomberg, Fox International, NBC and many others. Everything is available in one place and is updated every several minutes. All the information is collected and updated with the help of one of the amazing Google features.
Real time Quotes for DJIA Index and its components. See the daily price change of every company participating in the calculation of the index. This is the “quotes” section, so many other quotations will be available here soon.
In this section we will discuss some investment strategies based on the index. See some of the most common way you could invest in the index and its futures. Find out what “The Dogs Of The Dow” is and track the performance of the strategy for the last 50 years.
You can navigate through our sections using the main menu of the site at the upper right corner.
Futures are financial instruments, which belong to the group of derivatives, which means that they derive their value from the value some other financial instrument like shares, commodities, etc. Practically, there is nothing that complex about them. A future contract is a simple negotiation between two sides – the buyer wants to buy a certain asset and the seller wants to sell it at a specified future moment and price. This is simply a future deal, made in the present. For example a farmer, producer of grain could conduct a deal with a buyer (a flour maker) to sell her a specified quantity of his production, on a specified future date (usually after harvest). This way both sides realize some benefits – the farmer is guaranteed that he will find a market for his production and the buyer is guaranteed that he would be able to buy the amount of needed raw material at the specified price and date. This is good for them, because they can operate in less risky economic conditions. The farmer can plan in details his work, the money needed for his production for instance, because he knows what exactly he would get selling it. He can get a loan to grow his grain for example, against the future income, paid when the deal is executed. The buyer will not be afraid of price increases, or that there will be not enough grain to buy for her flour production. As you see, both of the participants in a future contract hedge (insure against) future risks like: price changes, future availability, or other uncertain market conditions. Nowadays this is the main function of future contracts – to hedge against risk.
Every futures contract has a specified: quantity of the commodity, quality, the exact price per unit, and the date and method of delivery. The buyer will buy under these conditions, and the seller will sell according to them on the date, when the contract expires. But participating in the futures market doesn’t mean that a real physical exchange of the commodity have to be made. Today’s futures contracts expire without delivery in most of the cases and are used mainly for hedging purposes. This is explained in more details here: how the futures market works.
A Brief History Of Futures Contracts
Future contracts were invented in the 19th century. In these times, farmers would grow their production and would bring it at the market after harvest, hoping to get a nice price for it. But sometimes even a buyer at any price was hard to be found. In this case their efforts and production were wasted in vain. Other times, the grain production for example, was so scarce that no one could buy at a reasonable price the desired quantity. The market was stormy and ineffective. This led to the creation of central markets, where farmers could negotiate their future production’s prices with buyers, which helped for the stabilization of prices and protected market participants from big losses. These types of deals were called forward contracts – the predecessors of future contracts. The difference between them, and futures, is that today’s future contracts are highly standardized, while forwards could be very different. For example future contracts are conducted for round amounts of the product – 10, 100, 1000, expiring after a standard period – a day, a month or a year, while forwards could be contracted for any amount and any future date – 376 kg. of grain to be traded after 123 days, for instance. Also the futures market is regulated, which is not true about forward deals, which are often negotiated directly between the buyer and the seller.
To read more about index futures, you can take a look at our article about DJIA Futures.
What Are Sustainability Indexes?
The Dow Jones Sustainability Indexes (DJSI) are a group of benchmarks, that was created in September, 1999 and their main purpose is to track the performance of the biggest and sustainability oriented companies in the world. These indexes are created by the Dow Jones company in collaboration with Sustainable Asset Management (SAM) company. The most significant is the “World Sustainability Index” and there also are European, Euro-zone, World Developed, American, Asian, Nordic and Korean benchmarks. The companies included in DJSI should be clearly and honestly managed. The unethical and operating in an unsustainable manner ones, has been rejected from inclusion in the index. DJSI is based on factors like corporate economic, climate change mitigation, assessing issues such as corporate governance, environmental and social performance, risk management, supply chain standards, labor practices, branding. The index includes general and industry specific sustainability criteria for the 57 economic sectors, which are defined according to the Industry Classification Benchmark (ICB). To be included in a sustainability index, a company is examined and selected based on its long term economic, social and environmental asset management plans.
The major benchmark – Dow Jones Sustainability Index World – was launched in 1999, when the beginning of these indexes was put. It is based on 2 500 big companies from around the world, as only the top 10% of them are included in its calculation (around 300 corporations). The value of the index depends on the share prices (market capitalization) of these companies.
The DJSI World has two sub indexes:
- DJSI World 80 – tracks the 80 biggest companies in the worlds
- DJSI World ex US 80 – tracks the 80 biggest companies globally, excluding USA.
For more information about these benchmarks, you can see their official website here: http://www.sustainability-index.com.
If you can’t beat the market – follow it! This is a popular maxim, briefly describing that it’s not so easy to beat the market, but it’s really easy to follow it. As you may know, “The Market” here means the overall performance of all traded shares, which is measured by stock indexes, like Dow Jones Industrial Average. So to follow the market, you simply need to invest your money in a market index.
Dow Jones Industrial Average’s value derives from the share prices of 30 of the biggest and most actively traded American companies. You can not buy or sell directly the index, because it’s not a real asset, it’s just a calculation based on the stocks of its components. But this doesn’t mean that the investment in the index is impossible, not at all. Here I will share some different ways of how make your money move with the Dow.
3 Ways To Invest In The Dow 30
- Buy the shares of the Dow Jones Index – as mentioned, the value of the Dow Jones is based on the prices of 30 companies’ shares. You can’t trade the index, but you can buy or sell its components, in the same proportion in which they participate in it. However, this is not the best option available. Some changes happen to the components from time to time, which rises the need for the portfolio of such a strategy to be recently adjusted. This involves higher transaction cost.
- Dow Jones Futures and other Dow derivatives– this is a nice way to “invest in the Dow”, because futures’ price movement is almost the same as the movement of the DJIA index. This strategy is more suitable for short term investing – day trading, for example. One reason for this is that futures are set to expire in a specified future moment.
- Index funds – This is the easiest and the most suitable way for long term Dow Jones investments. Index funds are usually publicly traded mutual funds, that hold a portfolio exactly the same, as a specified market index (Dow Jones Industrial Average for example).
These funds do all the work for you, to maintain the same as the index portfolio for a small commission. Such an investment is associated with professional management and low transaction costs, which makes it suitable for newbies or people who don’t want to get involved in trading.
Also, there are many investment strategies, based on the Dow Jones index, but not exactly following it. Some of them have outperformed the index for the last 45 years like The Dogs Of The Dow strategy.
What Are Futures?
Futures are derivative instruments, which means that they derive their value from the value of another financial instrument. In this case the value of a Dow Jones Future contract derives from the value of The Dow Jones Industrial Average Index. In very simple words, a future contract is a negotiated deal between a buyer and a seller, on an exact day in the future. The buyer agrees to buy the contracted amount at a predetermined price and the seller agrees to sell under these conditions. So a Dow Jones Future is a standardized contract in which the two sides agree today to to make a future deal , for a certain amount of lots at a defined price.
Why Do We Need These Futures?
As you might know, the Dow Jones Industrial Average is a stock index, and it’s not possible for anyone to invest in it directly. Many investors want to put their money in the index, and the futures are the most convenient way to do this. Dow Jones Futures (DJ) are traded on The Chicago Board of Trade, where the value of one contract is 10 times the value of The Dow – if the Dow trades at 12 000, one contract would be 120 000 $. This could be a lot of money for some people, but most of the brokers offer leverage. This means, that if someone wants to buy a contract, he/she could do it with 10 times less money for example. The rest are provided by the broker as a temporary loan to you. There are also mini Dow Jones future contracts (YM), their value is 5 times the value of the DJIA index.
Using leverage futures, you can have your money invested in one of the most followed and important indexes in the world. For example, to buy a standard Mini Dow Jones Futures contract, you need approximately a half of the current price of the index. This could be a risky operation, though. The move with one point of the price of the contract will equal 5$ change in the profit/loss of the position. So a 100 point move in a certain direction, could be $500, or 10% change in the position. Very often there are even bigger daily moves of the Dow Jones index which could cause bigger losses, if they are against you.