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Dow 30 Changes Its Starting Lineup

Blog & Social Media   |   Financial Planning   |   Dow 30 Changes Its Starting Lineup

Dow 30 Changes Its Starting Lineup

The Dow Jones Industrial Average (DJIA), one of the most widely followed stock market indices, has made some key changes to its starting lineup. Salesforce.com, Amgen Inc., and Honeywell International Inc. have replaced Exxon Mobil Corp., Pfizer Inc., and Raytheon Technologies Corp. The change went into effect before the market opened on Monday, August 31.

The DJIA has made several adjustments since it was first published in 1896, so a change to the Dow 30 lineup is nothing new. This time, the index changes were prompted by Dow component Apple Inc’s decision to split its stock four-for-one, which also took effect on August 31.

The DJIA is a price-weighted index, meaning the 30 companies are weighted in proportion to their price per share. By splitting its shares, Apple effectively reduced its influence—and the entire technology sector’s influence— on the Average. In fact, Apple’s move reduced the technology weighting within the Dow from nearly 28% to 20%. Said another way, before the split, Apple was the most influential component in the DJIA, but after the split, it drops to 17th. The addition of Salesforce is designed to help bolster the technology sector.

Some market analysts have said the changes make the index “more in tune with the new economy.” The DJIA changes reflect the growing influence of technology and the waning influence of the old economy. Oil and gas multinational Exxon, for example, joined the Dow more than 90 years ago in 1928.

 

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Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.

"Wisdom Wealth Strategies, LLC is a registered investment advisor offering advisory services in the states of Colorado and California, and in other jurisdictions where exempted." This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates.

Filed Under: Financial Planning, Investing, News

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Wisdom Wealth Strategies, LLC is an SEC-registered investment adviser. Our firm is notice filed in Colorado and Texas, and may be exempt from notice-filing in other jurisdictions where we serve our clients.


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