Dow Jones
What is Dow Jones?
The Dow Jones Industrial Average (DJIA), commonly referred to as the Dow Jones or simply the Dow, is a major stock market index that tracks 30 large, publicly-traded companies in the United States. It is one of the oldest and most widely recognized indices in the world, representing a broad spectrum of industries except for transportation and utilities, which are covered by separate indices.
Full History - Dow Jones
Origins and Early Development:
The Dow Jones Industrial Average (DJIA) was introduced on May 26, 1896, by Charles Dow, co-founder of Dow Jones & Company, and Edward Jones. Initially, the index consisted of 12 companies, primarily focusing on major industries of the time such as railroads and utilities. The first calculation of the index was 40.94, reflecting the aggregate performance of its component stocks.
Expansion and Evolution:
Over the years, the DJIA evolved to include 30 companies, expanding its coverage to better represent the broader U.S. economy. The index was adjusted to account for stock splits and other corporate actions, which has led to changes in its divisor over time. The addition of companies from diverse sectors has made the DJIA a more comprehensive indicator of market performance.
Modern Era:
In recent decades, the DJIA has grown to become one of the most recognized and widely followed stock market indices globally. Its historical significance and continued relevance make it a key barometer for the performance of major U.S. corporations and the overall health of the economy.
How to Trade or Invest in Dow Jones from India?
1. Investing through Mutual Funds and ETFs:
- Mutual Funds: Indian investors can invest in mutual funds that track international indices, including the Dow Jones. These funds are managed by Indian asset management companies and provide exposure to U.S. markets through various schemes.
- Exchange-Traded Funds (ETFs): ETFs that track the Dow Jones or other U.S. indices can be purchased through Indian brokers that offer international trading services. Examples include the SPDR Dow Jones Industrial Average ETF (DIA) and other similar funds.
2. Using Indian Brokers with International Trading Accounts:
- Global Investment Accounts: Some Indian brokers offer international trading accounts that allow investors to buy and sell U.S. stocks and indices. Investors can open these accounts to trade Dow Jones component stocks or invest in U.S. index funds.
- Foreign Investment Platforms: Platforms such as Zerodha, ICICI Direct, or HDFC Securities may provide access to U.S. markets. Investors should check if these platforms offer Dow Jones-related products or access to U.S. stock exchanges.
3. Investing through American Depositary Receipts (ADRs):
- ADRs: Some companies included in the Dow Jones may have American Depositary Receipts (ADRs) listed on Indian exchanges or accessible through international trading platforms. ADRs represent shares of U.S. companies and can be traded similarly to domestic stocks.
4. Direct Purchase of U.S. Stocks:
- International Brokerage Accounts: Investors can open accounts with international brokerage firms that facilitate the direct purchase of U.S. stocks and indices. These brokers may provide access to the Dow Jones and other major U.S. indices.
5. Exchange Traded Funds (ETFs) in Indian Market:
- International ETFs: Some ETFs listed on Indian exchanges may offer exposure to U.S. markets, including the Dow Jones. Indian investors can buy these ETFs through their regular brokerage accounts.
