DJIA - Why everyone is so worried? - djia companies
Why is everyone so about Dow Jones industrial down x% worried? If I understand correctly - DJIA only 30 large firms, which brings me to the following questions with them:
1. As these 30 big companies reflects the entire U.S. economy? Please explain briefly
2. Why SEC does not even in the middle of the system, the use of Dow Jones, Nasdaq and S & P500, and composed the system as a reference to the United States as the economy appears, in general, is not it better, would the entire U.S. economy to provide a particular day?
Please explain your answer briefly. Thank you!
Friday, January 8, 2010
Djia Companies DJIA - Why Everyone Is So Worried?
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5 comments:
Historically, the stock market seen as an economic indicator. So many people are affected. The 30 companies produce more and spend more to buy more. I think the SEC should change what you say. No one is satisfied with the current system ..
The Dow Jones average of industrial stocks is an important, and is intended to mimic a little industrial activity in the country. It is not specified, all activities on the economy, but. Other indices such as Nasdaq and the S & P, which are more common, but these do not reliably show the economy.
Indeed, there is also less than the average, among different industries orientation. All indices are private, there is no involvement of the SEC, or which would be more useful.
That was all, on average, a feeling of confidence among consumers and investors are able to do. They show how the growing crowd. Does this mean that the economy is up or down? Not really, but give an idea of how investors, who can give their willingness to invest, and hence the growth of the economy.
In addition, many people use the indices as an indication of her personal fortune. When I fall in equities, I am less inclined to spend money, and this may be a direct precursor of the state of the economy.
So, not necessarily on the stock market to take care of, but not negligible either.
The Dow Jones average of industrial stocks is an important, and is intended to mimic a little industrial activity in the country. It is not specified, all activities on the economy, but. Other indices such as Nasdaq and the S & P, which are more common, but these do not reliably show the economy.
Indeed, there is also less than the average, among different industries orientation. All indices are private, there is no involvement of the SEC, or which would be more useful.
That was all, on average, a feeling of confidence among consumers and investors are able to do. They show how the growing crowd. Does this mean that the economy is up or down? Not really, but give an idea of how investors, who can give their willingness to invest, and hence the growth of the economy.
In addition, many people use the indices as an indication of her personal fortune. When I fall in equities, I am less inclined to spend money, and this may be a direct precursor of the state of the economy.
So, not necessarily on the stock market to take care of, but not negligible either.
Of course, this means that there are problems in the economy. If the market falls, people react very emotionally and. Investments that lose their money for retirement anxiety, and others. Some people depend on income from investments, to a certain lifestyle. The same happens when the market goes up very high. The people are very euphoric.
The SEC no funds made available. Set by the media, brokers, and others. The Dow is supported by the public as a reliable indicator, since most accepted by the company, and the fact that substantial capital value of U.S. companies. There are many other people watch on average.
Although representing the fact of sin Doe Dow only 30 large companies, these companies are regarded as a benchmark company for the U.S. economy. Although they may not carry the entire economy of the United States into account, the Dow Jones for a long time for people to ignore the easy to use.
However, most investors are even after the S & P 500, Russell and Wiltshire and the NASDAQ average. In essence, all moving average comes very close.
On this last point, the SEC has not published any of these sentences - they are all to be created and issued by various financial companies. Moreover, the only thing that has really the indices of the indicators is the consumer on the economy. Since track prices of several indexes, which have so much to do with the feelings and opinions of the players with the basic principles (one can say that dot-com) bust of values, with the scholarship to the resistance of the economy still does not really viable.
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