The Dow Jones is 30 large, typically blue-chip companies on the NYSE and NASDAQ. It’s named after Charles Dow and Edward Jones.There are only 30 companies on this index so you could choose to invest in all 30 or you could invest in an index fund that does it for you. Find out how to invest in the Dow Jones index and more about how the Dow Jones works.
What is the Dow Jones?
The Dow Jones stock index is the 30 most traded stocks on the New York Stock Exchange and the NASDAQ. It contains some major well-known companies like Apple, Coca-Cola and McDonald’s.
Can I invest in the Dow Jones in the UK?
Yes, there are a couple of ways to trade or invest in the Dow Jones from the UK. While you can’t buy shares directly in the Dow Jones, you can invest in an exchange-traded fund (ETF) or index fund that tracks the performance of the 30 stocks in the Dow Jones Industrial Average index. You can also buy shares in the individual companies listed on the Dow Jones index, but this can be an expensive and time-consuming way to invest.
How to invest in the Dow Jones
- Choose an index fund or ETF that tracks the Dow. Some index funds track the performance of all 30 Dow stocks, whereas others only track a certain number of stocks or are weighted more towards specific stocks. You should select the fund that best suits your investment goals.
- Open a share-trading account. Once you’ve selected the fund you’d like to buy, you’ll need to open a trading account with a broker or platform that offers it. Different brokers have different fee structures, so it’s worth researching which platform best suits your needs before investing. You can compare trading platforms below.
- Deposit funds. Once you’ve set up an account, you’ll need to deposit funds. Depending on which broker you use, you may need to pay a forex fee when you deposit money.
- Buy the index fund. Once your account is set up and funded, you can buy the Dow Jones index fund. You generally pay a small annual fee in order to invest in an index fund or ETF.
How does the Dow Jones work?
The Dow Jones Industrial Average (DJIA), also known as the Dow, is a stock market index that tracks the stock performance of 30 of the largest companies on US stock exchanges. It’s not weighted by market capitalisation and does not use a weighted arithmetic mean. It is maintained by S&P Dow Jones Indices and is the second-oldest US market index.
Should I invest in the Dow Jones?
The Dow is an index of 30 of the largest and most successful companies on US stock exchanges. Between 2009 and 2019, the Dow gained over 21,000 points, an increase of around 260%. However, like most stock indexes, the Dow suffered heavy losses as a result of the coronavirus pandemic, but historically it has been a sensible investment option.
Dow Jones ETFs
- SPDR Dow Jones Industrial Average ETF (DIA)
- iShares Dow Jones US ETF (IYY)
- ProShares Ultra Dow30 (DDM)
- ProShares UltraPro Dow30 (UDOW)
- ELEMENTS Dogs of the Dow (DOD)
How to invest in Dow Jones stocks
The alternative way to invest in the Dow Jones is to buy stocks in the listed companies directly. You could choose to buy one share in each of the 30 companies in the Dow or select a few stocks to buy.
However, while this method gives you direct exposure to the companies in the Dow Jones, it’s likely to be an expensive way to invest. Many of the stocks in the Dow are worth hundreds of US dollars, so if you wanted to buy at least one stock in each company, you’d be looking at investing significant money.
Depending on which broker or trading platform you use, you may also be charged for each individual stock you buy, and these trading fees can often wipe out any potential profit you make. In comparison, you only pay a small annual fee when you buy an ETF, but your investment will still be tied to the performance of the Dow.
If this is what you want to do, here’s how:
- Find a stock broker. You’ll need to choose one that lets you invest in US stocks. Compare some below and consider their fees.
- Open a share-trading account. You’ll need some personal details and you’ll need to fund the account.
- Find the stock you want. Once you’ve chosen which stock you want to invest in, find it in the app and choose how many stocks you want.
- Buy them. It’s as easy as that!
Dow Jones (DJIA) live price
What companies are in the Dow Jones (DJIA)?
|American Express||NYSE||NYSE: AXP||Financial services|
|Apple Inc.||NASDAQ||AAPL||Information technology|
|Boeing||NYSE||NYSE: BA||Aerospace and arms|
|Caterpillar Inc.||NYSE||NYSE: CAT||Construction/Mining|
|Chevron Corporation||NYSE||NYSE: CVX||Petroleum industry|
|Cisco Systems||NASDAQ||CSCO||Information technology|
|The Coca-Cola Company||NYSE||NYSE: KO||Food industry|
|Dow Inc.||NYSE||NYSE: DOW||Chemical industry|
|ExxonMobil||NYSE||NYSE: XOM||Petroleum industry|
|Goldman Sachs||NYSE||NYSE: GS||Financial services|
|The Home Depot||NYSE||NYSE: HD||Retailing|
|IBM||NYSE||NYSE: IBM||Information technology|
|Johnson & Johnson||NYSE||NYSE: JNJ||Pharmaceuticals|
|JPMorgan Chase||NYSE||NYSE: JPM||Financial services|
|McDonald’s||NYSE||NYSE: MCD||Food industry|
|Merck & Co.||NYSE||NYSE: MRK||Pharmaceuticals|
|Procter & Gamble||NYSE||NYSE: PG||Consumer|
|The Travelers Companies||NYSE||NYSE: TRV||Financial services|
|UnitedHealth Group||NYSE||NYSE: UNH||Managed health care|
|United Technologies||NYSE||NYSE: UTX||Conglomerate|
|Visa Inc.||NYSE||NYSE: V||Financial services|
|Walgreens Boots Alliance||NASDAQ||WBA||Retailing|
|The Walt Disney Company||NYSE||NYSE: DIS||Broadcasting/entertainment|
Compare platforms for trading the Dow Jones
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The Dow Jones index is a little different to other indices, mainly because it’s only got a small number of stocks in it, of which most, if not all, are blue-chip stocks. This means that it’s not very diversified as smaller companies don’t impact it. It’s worth looking at the Dow in comparison with other indices, like the S&P 500 to get a larger picture of the economy. For investors, the Dow is a good place to get exposure to large blue-chip companies.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.