Investive, this is a very good question. With the economic turmoil of late, it is more important than ever to understand the ins and outs of the stock market.
First of all, 1 point on the U.S. stock market is equal to 1 U.S. dollar. For example, if stock in a certain company is down by 10 points, that is equivalent to ten dollars. The Down Jones Industrial Average is a cumulative number that represents the stocks of 30 large U.S. companies that are considered to be good indicators of the market's overall health. Thus, when the Dow Jones Industrial Average takes a sharp downtown, or a sudden upturn, we can use it to hypothesize about the overall state of the economy.
To clarify the term "stock", a stock can be defined as a share held in a company by an individual. A stock may be purchased for a given price based on market speculation, and then sold for either a profit or a loss. When the Dow Jones Average plummets, stocks in the 30 companies have also fallen.
I hope this helps!
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