The Dow Jones Industrial Average (DJIA), more simply referred to as the Dow Jones, or the Dow 30, is the world’s oldest and most followed stock market index. The Dow Jones Industrial Average is actually a price-weighted average of 30 some significant stocks traded at the New York Stock Exchange (NYSE) and the NASDAQ. The Dow Jones index shows how these, public owned companies based in the USA have traded during a standard trading season.
History: As mentioned, the Dow Jones Industrial Average (DJIA) is the oldest stock market index in the market. It is one of the several indices created by Charles Dow, the editor of the renowned Wall Street journal and the co-founder of the Dow Jones & Company (Which is now owned by NewsCorp). Along with the NASDAQ Composite, the S&P500, and the Russell 2000 Index, the DJIA is one of the closely watched benchmark indices tracking targeted stock market activity.
As online stocks trading is catching up the flavor and becoming the most popular way of trading stocks these days, the performance of Dow Jones index is continuing to be influenced by not only corporate and economic reports but a series of domestic and foreign events like war, terrorism, natural disaster that has the potential to hit the national economy.
The Dow Jones Industrial Average currently includes the following companies:
3M from the Conglomerate industry
ALCOA from the aluminum industry
AMERICAN EXPRESS from Consumer Finance
AT&T from Telecommunication
Bank of America from Banking
Boeing from Aerospace And Defense
CATERPILLAR from Construction And Mining Equipment
Chevron Corporation from Oil & Gas
CISCO SYSTEM from Computer Networking
COCA COLA from Beverages
DuPont from Chemical Industry
EXXONMOBIL from Oil & Gas
General Electric from Conglomerate industry
Hewlett-Packard(HP) from Technology
The Home Depot from Home Improvement Retailer
Intel from Semiconductors
IBM from Computer & Technology
Johnson & Johnson from Pharmaceuticals
JPMorgan Chase from Banking
Kraft Foods from Food Processing
McDonald’s from Fast Food
Merck from Pharmaceuticals
Microsoft from Software
Pfizer from Pharmaceuticals
Procter & Gamble from Consumer Goods
Travelers from Insurance
United Technologies Corporation from Conglomerate industry
Verizon Communication from Telecommunication
Wal-Mart from Retail
Walt Disney from Broadcasting & Entertainment
DJIA and the Performance of the Stock Market:
The Dow Jones Industrial Average (DJIA) is comprised of only thirty firms but it must be brought to your notice that these are thirty large firms whose market capitalization (which means number of shares multiplied by the stock price) is relatively large if compared to other firms. Hence, the performance of the Dow Jones Industrial Average (DJIA) indicates the performance of the broader market. So when someone says, "The Dow is Up", it means the market is doing well.
Apart from being a measure of the stock market performance, the DJIA is useful when you are up to benchmark the performance of a portfolio. People, nowadays, are more prone to investing in stocks and bonds which comprise an index. Those interested in investing in the the broader market may want to consider looking into the ETF SPDR Dow Jones Industrial Average (DIA), which tracks the dow. ETF trading has become enormously popular over the last few years, as there are ETFs for every major stock index world-wide now. Most online brokers allow customers to trade these ETFs.
Sunday, January 16, 2011
Tuesday, January 11, 2011
Barclays options - Good Buy
I haven't updated this page in a while so I'll post some of my recent trades.
I bought shares in Barclays at $16.50-$17.50 range on Jan 3-6. Bought some June $15 in the money call options as well. Barclays is easily the most undervalued bank in Europe at the moment. They're highly profitable and beaten down because of the EU worries. I like it more than Santandar / NBG, but both of those are good buys too IMHO.
I use OptionsHouse to trade because of their low commissions. No one can beat their $0.15 per contract prices.
I bought shares in Barclays at $16.50-$17.50 range on Jan 3-6. Bought some June $15 in the money call options as well. Barclays is easily the most undervalued bank in Europe at the moment. They're highly profitable and beaten down because of the EU worries. I like it more than Santandar / NBG, but both of those are good buys too IMHO.
I use OptionsHouse to trade because of their low commissions. No one can beat their $0.15 per contract prices.
Discount Brokers and Online Trading
Online stock trading is the call of the day and historically the best way for common folk to build wealth. In this age of avid online trading, the emphasis is more on time and technology and less on phone calls with brokers. The use of computers has definitely eased out the difficulties involved in the traditional way of stock handling. While trading stocks online we no longer need to deal with regular brokers and pay high commissions while buying or selling stocks. Our investments are totally under our control with a few clicks. And as many online brokerages or discount brokerages are vying for your business attention and hence the commission levels are at fairly reasonable and are easily affordable.
Investing has a long-term perspective and involves purchasing securities wherein the stability of value and the level of return are somewhat predictable. Online investing is extremely popular today among young investors to such an extent that most brokerage firms are offering online trading to their clients. The online brokers, unlike regular stock brokers, charge lesser fees since their role has diminished and is now limited to mediating. Hence online brokers are better termed as discount brokers. However, most online brokerage firms are nowadays considering research and advice service to the clients, just like full service brokerages.
Today, the rapidly growing volume of business done by online broker or discount brokers is witnessing their growth and success story. Even many banks and savings institutions are making discounts and online brokerage service available to the depositors who are willing to buy stocks, bonds, mutual funds and other investment vehicles. Some of the major discount and online brokerage firms are the Charles Schwab, Seibert, Vanguard Brokerage Services, York Securities, Accu Trade, TDAmeritrade, E*Trade, Fidelity Brokerage, Scottrade, and Trade Monster.
Discount brokers or online brokers: the range of service
Discount or online brokers offer little more than execution of trades which is very much unlike full service brokers. However, selecting a good brokerage firm has a good and important role to play in our whole investment decision. Always try to select a broker whose firm provides the type of services that you are looking forward to. Today, discount brokerage eservices include up-to-the-minute stock price quotation. With increasing demand, some online brokerage firms also offer its clients research staff that periodically analyses market, industry and company behavior. Some clients even receive monthly bulletins about the market activities, and recommended investment list, an account statement of the transactions of the period. Those looking to diversity their portfolios should look into brokers that allow them to trade foreign stocks.
Discount brokerage fees:
Much like full service brokerage firms, the discount brokers receive commissions for executing buy and sell order for their clients. Most of the brokerage commissions are not fixed and hence negotiable. Just because there are so many discount or online brokers today, there is a greater variation in the fees charged and services offered. The method of calculating the commissions are also not the same in every discount brokerage firms. Some firms base their commission rate on the dollar value of the transaction. Some firms base the rates of commissions on the number of shares traded. And again there are some discount brokerage firms who use both the above mentioned techniques. For options trading, there is almost always a "per contract" fee, but nowadays stocks are all done on a flat-rate basis. There is a great deal of overlap in the services offered by most of the discount and online brokerage firms. The firms with higher commissions offer more services and sometimes research related services are charged extra of the client.
Investing has a long-term perspective and involves purchasing securities wherein the stability of value and the level of return are somewhat predictable. Online investing is extremely popular today among young investors to such an extent that most brokerage firms are offering online trading to their clients. The online brokers, unlike regular stock brokers, charge lesser fees since their role has diminished and is now limited to mediating. Hence online brokers are better termed as discount brokers. However, most online brokerage firms are nowadays considering research and advice service to the clients, just like full service brokerages.
Today, the rapidly growing volume of business done by online broker or discount brokers is witnessing their growth and success story. Even many banks and savings institutions are making discounts and online brokerage service available to the depositors who are willing to buy stocks, bonds, mutual funds and other investment vehicles. Some of the major discount and online brokerage firms are the Charles Schwab, Seibert, Vanguard Brokerage Services, York Securities, Accu Trade, TDAmeritrade, E*Trade, Fidelity Brokerage, Scottrade, and Trade Monster.
Discount brokers or online brokers: the range of service
Discount or online brokers offer little more than execution of trades which is very much unlike full service brokers. However, selecting a good brokerage firm has a good and important role to play in our whole investment decision. Always try to select a broker whose firm provides the type of services that you are looking forward to. Today, discount brokerage eservices include up-to-the-minute stock price quotation. With increasing demand, some online brokerage firms also offer its clients research staff that periodically analyses market, industry and company behavior. Some clients even receive monthly bulletins about the market activities, and recommended investment list, an account statement of the transactions of the period. Those looking to diversity their portfolios should look into brokers that allow them to trade foreign stocks.
Discount brokerage fees:
Much like full service brokerage firms, the discount brokers receive commissions for executing buy and sell order for their clients. Most of the brokerage commissions are not fixed and hence negotiable. Just because there are so many discount or online brokers today, there is a greater variation in the fees charged and services offered. The method of calculating the commissions are also not the same in every discount brokerage firms. Some firms base their commission rate on the dollar value of the transaction. Some firms base the rates of commissions on the number of shares traded. And again there are some discount brokerage firms who use both the above mentioned techniques. For options trading, there is almost always a "per contract" fee, but nowadays stocks are all done on a flat-rate basis. There is a great deal of overlap in the services offered by most of the discount and online brokerage firms. The firms with higher commissions offer more services and sometimes research related services are charged extra of the client.
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