If you have been investing in the stock market for quite some time now, for sure, the Dow Jones 30 index belongs to your watchlist, especially if you monitor the US market. Like the S&P 500 and Nasdaq 100, Dow Jones 30 is also one of the most prominent indices in the world.
For many investors and traders, beating the market means beating an index like the DJ 30. So they closely watch its movement. If you are an active trader, for sure, you can’t miss checking whether this index is up or down or whether your portfolio outperformed it.
What is Dow Jones 30 Index?
Dow Jones is also known as The Dow, Dow 30, and Dow Jones Industrial Average (DJIA). It consists of 30 massive companies in the US. It was created by Wall Street Journal editor Charles Dow and was named after him and his business partner, Edward Jones. DJ30 is the second oldest index in the United States.
Top 30 Companies in Dow Jones by Weight in 2020:
- Apple Inc. (AAPL)
- UnitedHealth Group Inc. (UNH)
- Home Depot Inc. (HD)
- McDonald’s Corp. (MCD)
- Goldman Sachs Group Inc. (GS)
- Visa Inc. (V)
- Microsoft Corp. (MSFT)
- Johnson & Johnson (JNJ)
- 3M Company (MMM)
- Boeing Company (BA)
- Walmart Inc. (WMT)
- International Business Machines Corp. (IBM)
- Procter & Gamble Company (PG)
- Caterpillar Inc. (CAT)
- Walt Disney Company (DIS)
- Travelers Companies Inc. TRV)
- JPMorgan Chase & Co. (JPM)
- NIKE Inc. Class B (NKE)
- Chevron Corp. (CVX)
- American Express Company (AXP)
- Merck & Co. Inc. (MRK)
- Raytheon Technologies Corp. (RTX)
- Intel Corp. (INTC)
- Verizon Communications Inc. (VZ)
- Coca-Cola Company (KO)
- Exxon Mobil Corp. (XOM)
- Walgreens Boots Alliance Inc. (WBA)
- Cisco Systems Inc. (CSCO)
- Pfizer Inc. (PFE)
- Dow Inc. (DOW)
Who should Invest in Dow Jones 30?
Long term investors
Dow Jones index is a basket of solid companies and it continues to produce attractive income over time, with an average rate of return of 250% since 2009. But like other companies impacted by the recent coronavirus pandemic, long term investors can still benefit from investing an excellent index like Dow Jones.
Investing in an index is usually less volatile than investing in one stock alone because the fund is diversified to different companies. Moreover, the components of the Dow Jones index are stable and well-established companies.
Traders who want hedging
Aggressive traders who are into high-risk markets like cryptos and foreign currency trading can hedge their portfolio by investing in Dow Jones 30 to minimize some risks and add some stability.
Investors who like US companies
Dow Jones 30 is home to the world’s notable brands like Apple, McDonald’s, Microsoft, Visa, Procter & Gamble, IBM, Walt Disney, Goldman Sachs Group, and a lot more. If you want to focus your portfolio with US stocks, the DJ30 index could be a good slice of your portfolio.
How to Invest in Dow Jones 30 Index?
Step 1: Open a trusted CFD Broker Account
You can start investing in Dow Jones by using a trusted online broker like eToro. eToro is very user-friendly for both beginners and experts. Opening a trading account is free and fast.
Step 2: Buy some Dow Jones shares
Start your long-term investment and hedge your portfolio by buying some shares of the Dow Jones 30 index. Sit back and relax until you reach your trading goals.
Step 3: Use the lowest leverage
We assume that when you want to invest in Dow Jones, you want to minimize risks. Therefore, using a non-leveraged trade position can help you attain that.
Step 4: Set your Stop Loss
Setting up a Stop Loss will help each trade position to close automatically when the stop loss triggered. This feature is optional for every trader to minimize and control high losses from happening.
Step 5: Set your Target Profit
Setting your Target Profit will let your trade position to close automatically when it reached a certain percentage of profit or reached a specific amount of gains. Awesome right?
Best Dow Jones ETF
Investing in an ETF (Exchange-Traded Fund) is another way to invest in the Dow Jones index. The best Dow Jones ETF in the market today is SPDR Dow Jones Industrial Average ETF (DIA). It is a non-leveraged ETF that copies the performance of the Dow and its stock allocation.