How Does the Dow Jones Work?

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The Dow Jones Industrial Average is a major index that formulates the value of companies and gives them a score. Learn how to read and interpret the Dow Jones with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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This is financial adviser Patrick Munro talking about how does the Dow Jones work. The Dow Jones Industrial Average is a major index in the world of stock markets and primarily there are 30 industrial American stocks that form this oldest of the old indexes. Everyday on the television the index as it's known as vacillates up on television as shown as green and down as shown as red. And the way it works is that in the companies together and the fortunes of those companies is formulated into a computer model which results in a score. And you can check this index or combination of stocks known as the Dow Jones and by simply looking at your Blackberry you can see how the market's doing that day. Is it trending upwards? Well that would be green. If it's trending downwards, that would be red. So basically it gives you a good trend line analysis. This is Patrick Munro talking about how does the Dow Jones Industrial Average work.

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