Why the Dow?
  • Performance - long-term historical performance highly correlated w/S&P 500
  • Their Name - most recognized, continuously published since 1896
  • Familiarity of Components - substantial blue chip cos. - quality & acceptance
  • Diversification - unsystematic risk is reduced w/30 cos spread among industries
  • Convenience & Cost Savings to Investor - diversification investors need
  • Commitment - licensing for DJIA use in connection w/financial products
Number of Companies comprising index 30
Wide Recognition, Blue-Chip Composition and Diversification Accounts for more than 25% of the investable U.S. market as measured by Dow Jones U.S. Total Market Index.
Symbol DJIA
Weighting Scheme Price Weighted (most other indexes’ weightings are affected by both price changes and changes in the number of shares outstanding) www.djindexes.com
Review Frequency As Needed (usually only after corporate acquisitions or other important shifts in a company’s core business)
Inception of Index May 26, 1896
Companies
(as of June 8, 2009)
AIG, Inc. IBM
Alcoa Intel
Altria Group, Inc. Johnson & Johnson
American Express JP Morgan Chase
AT&T Inc. McDonald
Boeing Merck
Caterpillar Microsoft
Cisco Systems Inc. Minnesota Mining & Mfg.
Coca Cola Pfizer, Inc.
Dupont Proctor & Gamble
Exxon Mobil Travelers Cos.
General Electric United Technology
Hewlett Packard Verizon Communications
Home Depot Wal-Mart
Honeywell Walt Disney
 
 
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