Can somebody explain to me what the DOW JONES and NASDAQ are? im so confused...?

Question

I have money in stock, IRA ect. what is nasdaq and dow jones (and that other one) and how does the fluxuations between them effect my share prices. what do these groups consist of, and where can i get a 'dummies guide' to them and basically how the stock market works in relation to my IRA stocks (if it relates at all..hmm)

Answer 1

Dow Jones = about 30 stocks that are supposed to represent the industrial economy as a whole.

NASDAQ = An entire stock market, made up of hundreds if not thousands of stocks. Traditionally, because the NASDAQ was introduced as an alternative to the New York Stock Exchange (NYSE), it has a lot of tech and cutting edge stocks.

How these two "indexes" affect your portfolio really depends on what types of companies you hold stock in. It's best to use the news of these two as a rough guide rather than as gospel.

Answer 2

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Answer 3

The DOW are all your blue chip stocks, for the most part companies that have been in business a long time. They are more stable, those stocks don't rise and fall as much as the NASDAQ.

NASDAQ are typically smaller companies, a lot are technology based and they are considered more risky.

Your IRA does relate to them since it consists of stocks. You'll find a lot of books on the subject and you'll find everybody seems to be an expert.

I'll save you 15 years of trial and error. MOST financial advisors think LOSING money at some point is normal and you'll eventually earn your loses back. The best advice is to sell sell anything that drops 2% because more than likely it will keep going down. Human emotion is to think "It might go back up!" I lost 10's of thousands of dollars thinking like that before I figured out it's all logic. As HARD as it is to sell something knowing it's worth less, it's always nice to look back and see it could have been worse.

Typically they say the younger you are the riskier you can be with your investments. This is PERSONAL choice and I don't believe it. Had I been conservative and only earned 9% a year, I'd not have lost money in "growth stocks".

Don't freak out if you're money does drop, set the 2% limit. A lot of people sell during a short drop only to realize if they held on they would have made the money back and more.

Keep things simple unless you plan to spend every day monitoring stocks. If a stock shows a trend of going up, but it. If it shows a trend of going down, don't buy it. A lot of people think "Wow, it can't get much lower!" and but a stock, yet, it keeps going lower and lower.

The problem is they are watching the stock every day and convincing themselves it can't go lower. Do not buy a stock until it goes up.

The bible of the stock market is an old 1930's book called Reminiscences of a Stock Operator. The fundamentals have not changes and although it's old, it's still a good read. I wish I read this book 12 years ago.

As I've grown older I realized how much wisdom I ignored, hopefully you don't do the same.

Answer 4

The Dow is a price weighted index of 30 large capitalization stocks.

The NASDAQ is a composite index of around 5000 stocks on the Nasdaq stock exchange.

The S&P 500 index, which is a capitalization weighted index of 500 stocks on different exchanges, is probably more reflective of diversified mutual fund returns. Because thats the benchmark most of those funds track.

Every stock in the Dow is also in the S&P 500, along with Nasdaq 100 stocks.

Answer 5

You should try with Penny Stocks Trading (you can find more info here: http://pennystocks.toptips.org )

Penny stocks, also known as cent stocks in some countries, are common shares of small public companies that trade at low prices per share.
I've been subscribing to this PennyStock web site for about a year now and have loved the objective advice they give. He really does look for quality stocks and I've made some pretty nice profits on a lot of his suggestions. Being still fairly new to investing I have been dabbling a lot in penny stocks to try and grow my account. I may not have a big account, but it's a lot bigger than it was a year ago. On just one of Nathan's picks this year I managed to make my investment back ten-fold! Be careful! Penny stocks are notoriously risky but if you follow the right method the risk is almost 0. I suggest to invest only little money first and then reinvest the profits. This is the site I'm using: http://pennystocks.toptips.org

Answer 6

Dow Jones For Dummies

Answer 7

The NASDAQ and DOW JONES INDUSTRIAL are simply just two different markets for stocks. Nasdaq, the Dow, and about 5-10 other markets are run in the US. You can read about stocks and more at the Wikipedia link below, it is actually very fascinating.

Answer 8

Here it is, short and sweet. The DOW Jones Industrial average and the NASDAQ are just a whole bunch of stocks put in neat little piles to choose which ones you want to invest in. I know it's kinda funny, but it's true.

Answer 9

The Dow Jones Industrial Average (NYSE: DJI, also called the DJIA, Dow 30, or informally the Dow Jones or The Dow) is one of several stock market indices created by nineteenth century Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. Dow compiled the index as a way to gauge the performance of the industrial component of America's stock markets. It is the oldest continuing U.S. market index, aside from the Dow Jones Transportation Average, which Dow also created.

Today, the average consists of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical—many of the 30 modern components have little to do with heavy industry. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks—the sum of the component prices is divided by a divisor, which changes over time, to generate the value of the index


The NASDAQ (acronym for National Association of Securities Dealers Automated Quotations system) is an American stock market. It was founded in 1971 by the National Association of Securities Dealers (NASD), who divested themselves of it in a series of sales in 2000 and 2001. It is owned and operated by The Nasdaq Stock Market, Inc. the stock of which was listed on its own stock exchange in 2002. NASDAQ is the largest electronic screen-based equity securities market in the United States. With approximately 3,200 companies, it lists more companies and on average trades more shares per day than any other U.S. market.[1] With the impending purchase of the Nordic-based operated exchange OMX, following its agreement with Borse Dubai, Nasdaq is poised to capture 47% of the controlling stake in the aforementioned exchange, thereby inching ever closer to taking over the company and creating a trans-Atlantic powerhouse

Answer 10

the Dow and NASDAQ are indexes that give you an idea (only an idea) of what the stock market as a whole is doing --- the dow is a measure of (i believe) 30 companies listed --- its not a real measure of how your shares will be performing --- if you really want to know what is happening with your "investments" then you need to keep track of them yourself ---- do some research and dont rely upon "expert" advice as they are limited in what they can and cant tell you ---- its fun and if you ignore the experts you can make a lot of money --- especially now that the market has had another downturn