Dow Jones: Guide to Investing in DJ30 in 2021

The Dow Jones Industrial Average (DJIA) or quite simply “Dow 30”, the main stock index of the New York Stock Exchange, has so far been very popular among world stock indices despite its appearance which dates back more than a century.

Below you will be presented with information relating to the Dow Jones as a whole such as what it is, its current capitalization, the advantages you can benefit from investing in the DJ30 as well as the procedure to follow. We’ve also added some tips to help newbie traders.

How To Invest In The Dow Jones Easily?

Investing in the DJ30 is a straightforward process. In short, here are the steps to take in order to start investing in the Dow Jones:

  1. Register with a stock broker – we recommend eToro
  2. Account verification
  3. The deposit of funds
  4. Search for “ DJ30 ” in the search bar
  5. Configure your trade and start investing

Investing in the Dow Jones Index: Tutorial

As always, choosing a good broker is mandatory to open your trading account and start investing. For a demonstration of the investment in the Dow Jones Today index we take the broker eToro as an example.

No need to worry if you choose another broker because the steps will be the same regardless of the broker chosen.

  1. Registration With eToro

After visiting the official eToro website, click Sign Up to create an account. You will be asked to specify a username, an email address and create a password.

The boxes relating to the General User Conditions and the Privacy Policy must be ticked to complete the registration.

  1. Account Verification

Once the account is created, you must proceed to its verification. This is an essential step of the KYC (Know Your Customer) protocol predefined by eToro in order to reassure that you are the true owner of the account.

In this step, you will have to upload an official document proving your identity and proof of your address . At the top left, just below your chosen username, you will see Complete Profile, click on it and follow the steps to strengthen your profile.

  1. The Deposit Of Funds

On the Funds Deposits tab at the bottom left, click on it to fund your account.

There are multiple deposit methods so choose the one that best suits you and after specifying the amount, please hit Submit.

  1. Searching For “DJ30” In The Search Bar

In the section March é s , you will see all the available financial instruments. Slide the elevator until you see DJ30 among the clues.

Or search directly for “DJ30” by typing it in the search bar then tap on Invest.

  1. Configure Your Trade Then Proceed With The Investment

Now is the time to configure your trade. Buy or sell, the choice is yours. Specify the amount or the number of units you want to buy or sell then decide on your Stop Loss then the Take profit then finalize by pressing Open a position.

What Is The Dow Jones?

Certainly the oldest among the indices in the world, the American Dow Jones Industrial Average stock index was created in 1896 by journalists Charles Henry Dow and Edward Jones. It is owned by the Dow Jones Indexes, a joint venture 90% owned by CME Group and 10% by Dow Jones and Company.

The DJ30 is one of the top 3 most important stock market indices in the United States alongside the composite Nasdaq (National Association of Securities Dealers Automated Quotations) and the Standard & Poor’s 500 (SP 500).

The Dow Jones Industrial Average is the American equivalent of the French CAC 40 because it tracks the performance of the 30 largest American companies that are mainly listed on the New York Stock Exchange (NYSE). It is considered to be an indicator of the performance of the US economy in the sense that if the economy is growing it goes up and in times of crisis it is trending down.

The Dow Jones: Current Capitalization

Companies currently listed on the Dow Jones have not always been. When the index was last updated on August 31, 2020, here are the top 20 companies listed.

Below is a summary table in alphabetical order of the top 20 companies in the Dow Jones Industrial Average.

BusinessSymbolCapitalizationNumber of titlesDate Added
3MMMM$ 93.747 M576,019,4421976
AMERICAN EXPRESSAXP$ 83.648M805,161,1211982
AMGENAMGN$ 149.944M585,693,7752020
APPLEAAPL$ 2,019,800M4,275,634,0002015
BOEINGBA$ 96.634M564,448,7381987
CATERPILLARCAT$ 83,116M541,506,5751991
CISCO SYSTEMSCSCO$ 163.283M4,222,296,2022009
COCA COLAKO$ 212,109M4,295,438,9191987
CHEVRONCVX$ 135.754M1,867,267,8322008
DOW INCDOW$ 36.004M1,199,231,5902019
GOLDMAN SACHS GROUPGS$ 69.435M344,076,1762013
HOME DEPOTHD$ 303.668M1,075,522,8651999
INTELINTC$ 219.838M4,253,000,0001999
JOHNSON & JOHNSONJNJ$ 390.263M2,632,823,4751997
JPMORGAN CHASE & COJPM$ 301.835M3,047,604,4871991
MCDONALD’SMCD$ 168.219M744,102,5141985
MERCK & CO.MRK$ 205.476M2,529,241,0701979

Why Trade The Dow Jones Index?

Dow Jones is the oldest index in the world. It enjoys a very good reputation internationally. It is not only for its seniority and its history that it is necessary to trade the index. The index contains very large intrinsic values which should be of interest to any trader in the stock market.

Dow Jones And Liquidity

The liquidity of the stock market is the situation through which a market offers shares of significantly high volume to allow the trader to easily enter and exit a position. The Dow Jones Index is widely known for its liquidity. The index trading volume is high enough; which will allow the trader to change position easily.

The Volatility Of The Dow Jones Index

Volatility is the ability of an asset to change rapidly in response to events. The Dow Jones Index is closely linked to US macroeconomic fluctuations . These fluctuations can allow traders to make huge gains when they are good. If they are bad, the trader could make huge losses.

Dow Jones And Transparency

The general public has access to all the information available on this index. Its course, fluctuations and price are scrutinized in real time by brokers and provide traders without any distortion.

6 Tips For Investing In The Dow Jones For Beginners

To help you maximize your earnings on the Dow Jones Index , we would like to give you these tips on how to avoid the mistakes that many traders make. We categorize these tips into six main points.

  1. Determine Your Trading Style

There are four main styles of trading: scalping , day trading , swing trading, and position trading. Some styles are more suitable for the short term, such as scalping and day trading, and others for the long term, such as position trading.

  1. Use A Demo Account Before Trading The Dow Jones For Real

Most trading platforms offer you a demo account , through which you can practice trading before placing your own funds. You will then be able to test the platform before committing, to see if it suits you. It is also an opportunity to put in place several strategies and choose the most suitable for you.

In the case of eToro, you’ll have $ 100,000 free to use as you see fit. You won’t lose any money so you can train stress-free. Especially if you are a beginner, the demo account is an essential step before trading the Dow Jones for real.

  1. Study Price Charts And Actions

The daily and weekly Dow Jones charts can help you gauge current market sentiment, while price action can help you get a feel for what the market might do in the future.

  1. Use Technical Analysis And Indicators

It is very helpful to include technical analysis and trading indicators in your trading strategy as they can help identify certain signals and trends in the DJ30 market.

  1. Look For Trading Signals

By looking at the Dow Jones chart, you should be able to tell if the current trend is bullish or bearish. You can confirm current trends using momentum indicators such as the Stochastic Oscillator or the Relative Strength Index (IFR).

  1. Keep Up to Date With The Sector

Whenever news about a company is released, it can affect the stock price. Closely monitor the news that develop or last-minute events that could change the actions individual.