DIJA

The Dow Jones Industrial Average (DJIA) is a stock market index that measures the stock performance of thirty large companies listed on stock exchanges across the United States.

Like the S&P 500, it is one of the most recognizable and influential stock market indices globally.

However, it is somewhat limited in its scope, which does not capture a large enough snapshot as the S&P 500 or Russell 3000.

The DIJA features thirty large cap companies that are not weighted by market capitalization, and does not use a weighted arithmetic mean.

The value of the index is the sum of the stock prices of the companies included in the index, divided by a factor which is currently.

Ultimately, the composition of its stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as other macroeconomic factors.

How to Invest in the DIJA

There are multiple ways to invest in the DIJA. This includes index funds as well as through the availability of derivatives such as option contracts and futures contracts.

Most investors who track the index rely on mutual and exchange-traded funds (ETFs), which track its movement.

Both a mutual fund or an ETF can effectively replicate the performance of the index by holding the same stocks as the index, in the same proportions.

Futures and options contracts are also popular methods for exposure into the DIJA.

Despite its limitations in assessing the overall state of the US economy, the DIJA remains one of the most referenced in finance.