How The Dow Jones Industrial Average is Calculated

How The Dow Jones Industrial Average is Calculated
By JLP | December 4, 2006

http://allfinancialmatters.com/2006/12/04/how-the-dow-jones-industrial-average-is-calculated/

Have you ever wondered HOW the Dow Jones Industrial Average is calculated? Here’s how!

According to the Dow Jones website, the index is calculated as follows:

The Dow Jones averages are unique in that they are price weighted rather than market capitalization weighted. Their component weightings are therefore affected only by changes in the stocks’ prices, in contrast with other indexes’ weightings that are affected by both price changes and changes in the number of shares outstanding.

When the averages were initially created, their values were calculated by simply adding up the component stocks’ prices and dividing by the number of components. Later, the practice of adjusting the divisor was initiated to smooth out the effects of stock splits and other corporate actions.

According to this weekend’s Barron’s, the current divisors are:

Dow Jones 30 Industrial Average: .12482483
Dow Jones 20 Transportation Average: .20882618
Dow Jones 15 Utilities Average: 1.4646169
Dow Jones 65 Composite Average: .77093357

So, to illustrate the calculation of the Dow Jones Industrial Average, look at the following table:

Ticker Symbol	Current Price (12/02/2006)
AA	30.87
AIG	69.77
AXP	58.55
BA	89.55
C	49.38
CAT	61.19
DD	46.45
DIS	33.09
GE	35.28
GM	29.69
HD	38.97
HON	42.81
HPQ	39.44
IBM	91.25
INTC	20.93
JNJ	65.97
JPM	46.01
KO	46.57
MCD	42.08
MMM	79.98
MO	84
MRK	45.06
MSFT	29.12
PFE	27.86
PG	62.69
T	34
UTX	63.86
VZ	34.64
WMT	45.87
XOM	77.2
TOTAL OF ALL PRICES	1522.13
CURRENT DIVISOR	.12482483
DIVIDE TOTAL BY DIVISOR	12194.13

Pretty cool isn’t it?

You can also calculate how much a particular stock is going to affect the average. For instance, today Pfizer is down 3.19 (at this writing). To find out what kind of impact that particular stock will have on the Average, you simply divide the price change by the divisor (-3.19 ÷ .12482483 = -25.56). So, Pfizer is taking away 25.56 points from the Dow Jones Industrial Average so far today. Fortunately, the rest of the components are doing okay, as the Dow is up around 95 points right now.

Now go tell all your friends and family that JLP taught you something interesting today!

http://allfinancialmatters.com/2006/12/04/how-the-dow-jones-industrial-average-is-calculated/

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Mineweb.com -investment website Gold rises as global economic growth and the monetary system problems persist - WHATS NEW | Mineweb

Mineweb.com - The world's premier mining and mining investment website Gold rises as global economic growth and the monetary system problems persist - WHATS NEW | Mineweb

Talk of a gold bubble is premature, while fears of a deepening global recession continue to worry investors and the never ending problems in the Eurozone provide cause for concernAuthor: David Levenstein
Posted: Tuesday , 06 Sep 2011
JOHANNESBURG -

Gold prices punched through the $1900 level on Monday after falling by almost $200 an ounce in two days only two weeks ago. This rebound comes in spite of a series of margin hikes for gold futures by the CME, the Hong Kong Mercantile Exchange, the Shanghai Gold Exchange as well as the Thai Exchange. Obviously traders are confident that betting on the long side is worth the risk. I believe the initial leg of this rebound occurred almost as soon as gold hit $1702 an ounce. And, I see prices soon making new record highs in the short-term despite all the regular drivel made by the same usual gold critics. Only two weeks ago they were screaming their regular disparaging remarks and warning people of an impending bubble in the gold market. I wonder what they have to say now.

As investors turn to safe haven assets amidst this turmoil, we can expect to see higher gold prices. In addition, and while I do not recognise them as a safe haven investment, investors will turn to US Treasuries. And, when it comes to currencies we have seen the SNB intervene in the currency market to try and keep a lid on the Swiss Franc.

I have long advocated having at least 10% - 30% of your portfolio in physical precious metals. Since early 2003, this has turned out to be profitable advice, as gold and silver have outperformed most other asset classes. ......

http://www.mineweb.com/mineweb/view/mineweb/en/page31?oid=134907&sn=Detail&pid=31

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Swiss Gold Price(Swiss Francs) Sept 6 2011

Swiss Gold Price(Swiss Francs)

Conversion : 1 troy ounce = 31.1034768 grams


http://goldprice.org/swiss-gold-price.html

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Swiss move aggressively to weaken franc

Sep 6, 2011 by Euronews

Switzerland's central bank has turned the tables on investors who have buying the Swiss franc as a safe haven and driving up its value against other currencies.
The Swiss National Bank shocked foreign exchange markets by setting a minimum exchange rate target of 1.20 francs to the euro.

The franc's rally has been threatening the Swiss economy by making the country's exports too expensive.

http://www.euronews.net/

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Mineweb.com - investment website Swiss currency peg hits gold price - WHATS NEW | Mineweb

Mineweb.com - The world's premier mining and mining investment website Swiss currency peg hits gold price - WHATS NEW | Mineweb

Switzerland's decision to peg its currency to the euro on Tuesday shook financial markets and battered the franc, putting the price of bullion in Swiss francs for its largest daily gain in three years.Author: By Amanda Cooper (Reuters)
Posted: Tuesday , 06 Sep 2011

LONDON (REUTERS) -

Gold fell from record highs on Tuesday, after Switzerland's decision to peg its currency to the euro shook financial markets and battered the franc, putting the price of bullion in Swiss francs for its largest daily gain in three years.

The Swiss National Bank said on Tuesday it would set a minimum exchange rate target of 1.20 francs to the euro and would enforce it by buying foreign currency in unlimited quantities.

The Swiss franc tumbled by more than 7 percent against the dollar and by more than 8.5 percent against the euro, while gold priced in the currency rose by more than 7 percent, and was set for its biggest daily gain since mid-September 2008, when the global credit crunch intensified, prompting the U.S. Federal Reserve to halve rates to 1.0 percent.

Spot gold was last quoted down 0.5 percent at 0918 GMT, having risen earlier to a record $1,920.30 an ounce

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Inside the News: Swiss franc tumbles after devaluation

by ReutersVideo on Sep 6, 2011

Sept. 6 - The Swiss National Bank has rocked the markets, effectively devaluing the Swiss franc with the promise of unlimited liquidity to defend a set euro/Swiss target of 1.20.

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

Swiss Franc Plunges as SNB Sets Limit at 1.20 Per Euro

Sep 6, 2011 by Bloomberg

Sept. 6 (Bloomberg) -- The Swiss franc plunged versus the dollar and euro after the Swiss National Bank set a minimum exchange rate of 1.20 francs per euro. Maryam Nemazee and Linda Yueh report on Bloomberg Television's "The Pulse." (Source: Bloomberg)

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

September 6, 2011 Midday Financial Report

IraEpsteinFutures | Sep 6, 2011 | 143 views

Commodities, Ira Epstein, Linn Group, Futures Trading, Online Trading, Technical Analysis, Financial Report, Sales: 866-973-2077

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.

September 6, 2011 Midday Metals Report

IraEpsteinFutures | Sep 6, 2011 | 197 views

Commodities, Ira Epstein, Linn Group, Futures Trading, Online Trading, Technical Analysis, Metals Report, Sales: 866-973-2077

All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.