For most investors, the Dow Jones Industrial Average (DJIA) is a very familiar name. For over 116 years, the Dow has been a main symbol of the U.S. stock market.
So ingrained is the DJIA in the American financial mind that investors often overlook what it represents and how accurately it reflects broader market trends.
Tracking American Industry
The DJIA was established in 1896 by Charles Dow, editor of the Wall St Journal, who co-founded Dow Jones & Company with statistician Edward Jones. The original DJIA comprised 12 industrial stocks and the average was just that — a basic average of those 12 stock prices.