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Chapter 5. Investments > Your Stock Portfolio

Your Stock Portfolio

Dow Jones Industrial Average

We hear much about the Dow Jones Industrial Average. Every day people find their mood rising or falling based upon whether the Dow, which to many people is synonymous with the overall economy, is doing well or poorly. But how many people actually know what the Dow Jones Industrial Average is? After you read this section, you will know this fascinating trivia so you can toss it out at an opportune moment and look really, really smart or be ready when Alex Trebek asks, during Final Jeopardy, a question about the number of stocks that make up the Dow Jones Industrial Average. And remember to make your answer in the form of a question. He is so very picky about that.

In any event, the Dow Jones Industrial Average is an average of only 30 stocks that are deemed by many people to reflect the stock market in general. The first Dow Jones Industrial Average began in 1896 and was made up of 12 companies, most of which have faded from the scene: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennessee Coal & Iron, U.S. Leather pfd. and U.S. Rubber. Over the years, companies have come and gone, although General Electric still appears to have plenty of electricity left in it. The Dow now comprises 30 stocks. The most recent adding and dropping of companies came in 1999 when Microsoft, Intel, SBC Communications and Home Depot replaced Chevron, Goodyear Tire and Rubber, Union Carbide and Sears.


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