The Dow Jones Industrial Average Is Considered A -Weighted Average. DJIA – Historical Performance of the Dow Jones Industrial Average

You are searching about The Dow Jones Industrial Average Is Considered A -Weighted Average., today we will share with you article about The Dow Jones Industrial Average Is Considered A -Weighted Average. was compiled and edited by our team from many sources on the internet. Hope this article on the topic The Dow Jones Industrial Average Is Considered A -Weighted Average. is useful to you.

DJIA – Historical Performance of the Dow Jones Industrial Average

With the recent volatility causing instability in people’s portfolios and peace of mind, I thought I’d take a look at how the DJIA (Dow Jones Industrial Average) has performed over the past 30 years. plus since 1975. During this period, the DJIA has gone from a high return of 38% in 1975 to a loss (-17%) in 1977. Since from 1975 to 2006, there were 23 good years and 9 bad years. If you take a simple average of the annual returns over that period, you’ll arrive at an average of 10.83%.

Does this mean you will get a 10.83% annual return investing in the DJIA? NO Some years you will make that much or more while others you will make less money, even if you lose money. Your average return is not as simple as taking an average. Let me give you an example: Two people invest their money in different financial instruments for 5 years. The first investor earns an annual interest rate of 8%, while the second investor earns 15%, (-3%), 18%, (-12%), and 22% over five years. Both of these investors earned a simple average of 8% over 5 years, but did they earn the same amount?

Investor 1:

Initial investment $10,000.00

After the first year 8% Earn $10,800.00

After Year Two 8% Earn $11,664.00

After Year Three 8% Earn $12,597.12

After the fourth year 8% Earn $13,604.89

After the fifth year 8% earns $14,693.28

Investor 2:

Initial investment $10,000.00

After the first year 15% Earn $11,500.00

After Second Year (-3%) Loss $11,155.00

After Third Year 18% Earn $13,162.90

After the fourth year (-12%) loss $11,583.35

After the fifth year 22% earns $14,131.69

As you can see, one user earned almost $562.00 even if they calculated on a simple yearly average. However, in real return, the first time investor earned more than 5.5% more than the five-year investment. I use this example to show the value of reducing negative feedback. The best way to do this is to diversify, not only in different stocks, but in different asset classes. Finally, remember that historical data doesn’t mean the future will be the same, but it can be used as a starting point for predicting reasonable returns.

Video about The Dow Jones Industrial Average Is Considered A -Weighted Average.

You can see more content about The Dow Jones Industrial Average Is Considered A -Weighted Average. on our youtube channel: Click Here

Question about The Dow Jones Industrial Average Is Considered A -Weighted Average.

If you have any questions about The Dow Jones Industrial Average Is Considered A -Weighted Average., please let us know, all your questions or suggestions will help us improve in the following articles!

The article The Dow Jones Industrial Average Is Considered A -Weighted Average. was compiled by me and my team from many sources. If you find the article The Dow Jones Industrial Average Is Considered A -Weighted Average. helpful to you, please support the team Like or Share!

Rate Articles The Dow Jones Industrial Average Is Considered A -Weighted Average.

Rate: 4-5 stars
Ratings: 2151
Views: 76594542

Search keywords The Dow Jones Industrial Average Is Considered A -Weighted Average.

The Dow Jones Industrial Average Is Considered A -Weighted Average.
way The Dow Jones Industrial Average Is Considered A -Weighted Average.
tutorial The Dow Jones Industrial Average Is Considered A -Weighted Average.
The Dow Jones Industrial Average Is Considered A -Weighted Average. free
#DJIA #Historical #Performance #Dow #Jones #Industrial #Average

Source: https://ezinearticles.com/?DJIA—Historical-Performance-of-the-Dow-Jones-Industrial-Average&id=699353

Related Posts

default-image-feature

What To Eat On Low Carb Diet To Lose Weight Low Carb Diet Food is Vital For Your Weight Loss

You are searching about What To Eat On Low Carb Diet To Lose Weight, today we will share with you article about What To Eat On Low…

default-image-feature

Can You Lose Weight By Not Eating Late At Night 10 Lies the Fitness and Nutrition Industry Are Telling You

You are searching about Can You Lose Weight By Not Eating Late At Night, today we will share with you article about Can You Lose Weight By…

default-image-feature

What To Eat On A Liquid Diet For Weight Loss Be Careful With a Liquid Diet Weight Loss Program

You are searching about What To Eat On A Liquid Diet For Weight Loss, today we will share with you article about What To Eat On A…

default-image-feature

The Average Weight Of The Brain At 2 Year Old Introduction to 3D Technology

You are searching about The Average Weight Of The Brain At 2 Year Old, today we will share with you article about The Average Weight Of The…

default-image-feature

What To Eat On A Healthy Diet To Lose Weight Is There a Way to Go Around Healthy Weight Loss Plan and Still Lose Weight?

You are searching about What To Eat On A Healthy Diet To Lose Weight, today we will share with you article about What To Eat On A…

default-image-feature

The Average Weight Of One Of These What Is It Ideal Body Fat Percentage – How to Achieve the Ideal Body Fat Percentage

You are searching about The Average Weight Of One Of These What Is It, today we will share with you article about The Average Weight Of One…