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News How to read the DOW

  1. Aug 11, 2011 #1
    In light of recent events...

    So when the news says that the DOW is up 400 so-and-so points, what exactly does it mean? What are "points" and what is it "up" in relation to, the beginning of the day? Stocks seem very interesting to my and a working knowledge of them may come in handy to me if I ever wish to invest, does anyone recommend a resource I can use to learn everything I need to know?

    Danke.
     
  2. jcsd
  3. Aug 11, 2011 #2
    The starting point might be for you to visit the website of the Dow Jones Industrials.
    http://www.google.com/finance?client=ob&q=INDEXDJX:DJI

    Basically, the DJI tracks a select group of stocks on a daily basis. The stocks are chosen carefully and are typically not replaced unless special circumstances require a change.

    By tracking the same stocks across quarterly and annual business cycles investors gain a perspective of the overall performance of stocks in general. Unless you invest in a fund that strictly invests in a Dow portfolio - your investment will not perform exactly the way the Dow does - you will have your own unique results.
     
  4. Aug 11, 2011 #3

    Pengwuino

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    Also, yes, it's relative to the start of the opening bell at either 8am or 9am, I forget.
     
  5. Aug 11, 2011 #4

    jtbell

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    You might also check out Wikipedia (with the usual caveats about its reliability):

    http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

    The New York Stock Exchange opens trading at 9am and closes at 4:30pm.
     
    Last edited: Aug 12, 2011
  6. Aug 12, 2011 #5
    Is there a book I can read to learn this? There seems to be a lot of interconnectivity between different things and I don't think I can get a good grasp of what is important from wikipedia.
     
  7. Aug 12, 2011 #6

    jtbell

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    This one actually hasn't been published yet, but it might be up your alley:

    https://www.amazon.com/Investing-Dummies-Eric-Tyson/dp/047090545X

    Hopefully someone else can suggest something that's available right now. I'm old enough that I don't remember how I learned the basics. As I approach retirement, I'm still learning about investing. :smile:
     
  8. Aug 12, 2011 #7

    Hepth

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    There are a ton of "free" stock/investment sites online where you start with some fake money, say $5000, and it lets you choose what you want to do with it pretty realistically, and follows the current markets. Can buy bonds/stocks/futures/etc.
     
  9. Aug 12, 2011 #8
  10. Aug 12, 2011 #9

    Pengwuino

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    What, when did they start closing at 4:30pm? The timing is always a little confusing as a west coaster... I really think of the NYSE closing at 1pm.
     
  11. Aug 12, 2011 #10

    Pengwuino

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    Check out http://www.khanacademy.org/ I'm pretty sure they have some great talks on how the stock market works.

    Plus the site is awesome no matter what.

    We use to do that in elementary school! SCREW YOU DISNEY, I could have won that free pizza if it weren't for your sub-par earnings report.
     
  12. Aug 12, 2011 #11

    jtbell

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    Be thankful you don't live in Arizona, which stays on standard time all year round. :wink:

    (When my mother lived in Arizona during her last years, my wife and I always had to think twice before calling her up. "Is that a two- or three-hour time difference right now?")
     
  13. Aug 12, 2011 #12
    I think I saw this website on Colbert Report once talking about math lectures. :)
     
  14. Aug 16, 2011 #13

    Redbelly98

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    I'm pretty sure it closes at 4:00 pm. Times are Eastern (USA).

    In a nutshell: The DOW reflects the combined stock prices of 30 large US companies. The companies used for the DOW are large and industry leaders (eg. GE, McDonald's, Microsoft, Wal-Mart), so in a sense the DOW reflects the state of the top companies in America.

    I had been under the impression that a weighted sum of the 30 stocks was used to calculate the DOW, but according to the Wiki article it is a straight sum of the 30 stock prices, times a factor that gets adjusted from time to time.
     
  15. Aug 16, 2011 #14
    If it goes up 400 points, since it's near 10k now, it means it went up 4%.

    For a good book, get How to make money in stocks, by William O'Neill. He's one of the best speculators ever, and explains very well his strategy.

    How age are you? You seem just like me, when I was in high school I started gaining interest on the markets too :smile:

    And here's a good advice (which William O'Neill repeatedly says): Don't pay attention to "financial analysts" on the newspapers/tv. Most don't have a clue about markets and others have a conflict of interest, which means they'll only say things that benefits them. And btw, those simple books others have mentioned only cover the basics, you'll never learn how to trade with them. And I don't want to disappoint you soon, but to be a winning trader takes a loooot of work.
     
    Last edited: Aug 16, 2011
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