The Dow Jones Industrial Average
By Stephen Smith
July 8th, 2007
The press likes to gauge the stock market with the Dow Industrial Average, and I wanted to give some historical perspective to this benchmark. The Dow is one of the oldest indexes which was created by Dow Jones & Company’s co-founder Charles Dow. It was first published on May 26, 1896. Dow compiled the index as a way to gauge the performance of the industrial component of America’s stock market. It first represented twelve stocks from various American industries. In 1916, the number of companies was increased to twenty; then in 1928 the number was increased to thirty companies. The “industrial” portion of the name is now only a historic relic, as many of the thirty companies that make up the Dow have nothing to do with heavy industry. The only company left of the original twelve is General Electric. The following is a list of milestone closing levels of the Dow Jones Industrial Average:
- The index started at 40.94 when it was first published on May 26, 1896
- The first bull market (1896-1929)
- The index closed above 100 on January 12, 1906
- The index closed above 200 on December 19, 1927
- The index closed above 300 on December 31, 1928
- The post-World War boom (1949-1966)
- The index closed above 400 on December 28, 1954
- The index closed above 500 on March 12, 1956
- The index closed above 600 on February 20, 1959
- The index closed above 700 on May 17, 1961
- The index closed above 800 on February 28, 1964
- The index closed above 900 on January 28, 1965
- The index closed above 1,000 on November 14, 1972
- The l980’s bull market (1982-1987)
- The index closed above 2,000 on January 8, 1987
- The 1990’s bull market (1990-2000)
- The index closed above 3,000 on April 17, 1991
- The index closed above 4,000 on February 23, 1995
- The index closed above 5,000 on November 21, 1995
- The index closed above 6,000 on October 14, 1996
- The index closed above 7,000 on February 13, 1997
- The index closed above 8,000 on July 16, 1997
- The index closed above 9,000 on April 6, 1998
- The index closed above 10,000 on March 29, 1999
- The index closed above 11,000 on May 3, 1999
- The index closed above 12,000 on October 19, 2006
- The index closed above 13,000 on April 25, 2007
- The index closed above 14,000 on July 19, 2007
The Dow closed on July 31, 2007, at 13,211, which is a good reminder that prudent investing takes both patience and discipline. As always, we appreciate the trust you have placed in us to manage your investments.
