By Donna Westfall – January 5, 2018 – Whether you love him or hate him, President Trump is taking credit for the Dow Jones Industrial Average (DJIA or simply Dow) breaking all time records.
What does this mean and why is it happening?
The index was created in May 1896 by Charles Dow. He was the creator of the Wall Street Journal. His buddy, Edward Jones, was a statistician thus Dow Jones. Here’s what the index does. It measures the daily stock price movements of 30 large, publicly-owned U.S. companies.
Now get this: The 30 blue-chip companies, considered to be the leaders of the economy, are chosen by the editors of the Wall Street Journal.
Here’s the 30 companies currently making up the Dow Jones. Recognize them? Of course you do:
2. American Express
8. Coca Cola
10. Dow DuPont Inc
11. Exxon Mobile
12. General Electric
13. Goldman Sachs
14. Home Depot
17. Johnson & Johnson
18. JP Morgan Chase
24. Proctor & Gamble
25. Travelers Companies, Inc.
26. United Technologies
27. United Health
30. Wal Mart
Of the original dozen companies that started the Dow in 1896, are any of them still on today’s list? Yes. General Electric. In the mid-1880s, the index stood at a level of 62.76. They’ve come a long way, baby.
Why does Trump take credit? Early Friday morning Trump tweeted: “Dow goes from 18,589 on November 9, 2016, to 25,075 today, for a new all-time Record. Jumped 1000 points in last 5 weeks, Record fastest 1000 point move in history. This is all about the Make America Great Again agenda! Jobs, Jobs, Jobs. Six trillion dollars in value created!”
Does that mean you should run right out and invest in stocks?
Not necessarily if you don’t know what you’re doing. Start doing some research, then talk to people in the industry because what goes up can and does come down. The best advice, in my opinion, is to never invest more than you can lose.