“Stocks traded heavily today. The NASDAQ was up 53.25 points at the end of the market day to close at 3,231. The Dow Jones Industrials were up 67.34 points today to close at 10,682.”
You may hear a similar report on the evening news. What does all this mean? These figures are very important to people who have money invested in the stock market. Reports such as these inform investors of whether they’re gaining or losing money.
I know words like stock market, mutual funds, stocks and trading may sound very intimidating. Don’t let these terms prevent you from investing your money in the stock market.
To begin, let’s understand the difference between the NASDAQ and the Dow Jones. According to the NASDAQ Web site, when NASDAQ began in 1971, it was considered an acronym for the National Association of Securities Dealers Automated Quotations. Today, that acronym no longer exists. Instead, it’s a major world stock market that led the way in screen-based technology and growth companies. There is no exact definition for NASDAQ, but the best description is technology and growth.
According to the Dow Jones Web site, Dow Jones & Company was founded in 1882 by three reporters, Charles H. Dow, Edward T. Jones and Charles Bergstresser.
Dow Jones & Company began publishing The Wall Street Journal in 1889 and Barron’s National Business and Financial Weekly in 1921. It now publishes The Wall Street Journal, Barron’s, Far Eastern Economic Review, Vedomosti (The Record) and owns Ottaway Newspapers, Inc.
In addition to publications that inspect the stock market, Dow Jones also has a place in the stock market with stock indicators. It launched the Dow Jones Transportation Average in 1884, the Dow Jones Industrial Average in 1896, the Dow Jones Utility Average in 1929, the Dow Jones Global Indexes and the Dow Jones STOXX family of indexes in 1998.
The Dow Jones index we most commonly hear is the Dow Jones Industrial Average. It tracks the world’s largest stock market and is the most widely followed stock market indicator.
The basic purpose of the stock market indicators is to inform investors of how their stocks are performing. They don’t show the figures for each individual stock, but they do show the average of all the stocks included in the index.
As a potential investor, it is important to understand the functions of the NASDAQ and Dow Jones. They’re the two primary indicators that can help you decide which funds to take a closer look at.