Investing 102

[Vegas69]

Greg, I don't want you to have a day off. I haven't been doing this long but today was interesting.

The DJIA declined .41%.
The Nasdaq increased .3%.

My account went UP .23% today.

What's interesting is 3 out of 4 of best performers increased along with my WORST performer.

Is this just due to my account characteristics or did everybody see this today? Normally the DIJA and Nasdaq seem to follow suit. Why was today different?

I know this is over analytical but I'm trying to learn a little more about the stock market..

[GregWeld]

Originally Posted by Vegas69

Greg, I don't want you to have a day off. I haven't been doing this long but today was interesting.

The DJIA declined .41%.
The Nasdaq increased .3%.

My account went UP .23% today.

What's interesting is 3 out of 4 of best performers increased along with my WORST performer.

Is this just due to my account characteristics or did everybody see this today? Normally the DIJA and Nasdaq seem to follow suit. Why was today different?

I know this is over analytical but I'm trying to learn a little more about the stock market..

Good question Todd -- with no explanation except that the DJIA -- is the DOW JONES INDUSTRIAL AVERAGE.... so if you're not invested in much that's actually in the Dow --- then you're not tracking with them.

People don't really understand these indexes.... and without writing a book about it I'll give a brief explanation:


"The Dow" is made up of 30 stocks that they pick --- It's PRICE WEIGHTED - so they add up all 30 stocks and then divide that number by 30 to get the "Average". Since there's ONLY 30 STOCKS that actually make up "The Dow" -- you can see how if you don't own any/many of them - your day can be different than their day.


The NASDAQ --- is made up of every stock traded on it's platform -- so think like 3000 stocks and they are MARKET CAP WEIGHTED --- so the bigger market cap companies pull more than the smaller caps (Cap is the value of the company - which is computed by multiplying all the outstanding shares times the closing market price per share...

[Vegas69]

Makes sense to me, thanks for the explanation.

[GregWeld]

Originally Posted by Vegas69

Makes sense to me, thanks for the explanation.

You're welcome!


Years ago I had to actually look all this up for myself - when one of the tv talking heads said that "IBM was taking the Dow down".... I'm like "really" -- IBM all by itself?? Sure enough --- most of the rest of the 30 were doing just fine - but old IBM was struggling and was killing the average.

Personally -- I've given up paying too much attention to the Dow and the NASDAQ averages... they're general trends -- but I've had up years when they've had down... and more importantly I've MADE MONEY every year - regardless of what those two indexes are doing. So do they really matter? Like selling real estate -- yeah the "market" can suck - but that doesn't mean you can't still make money. It'll suck you down if you let it - but it's not the only numbers that matter.

[CamaroMike]

Greg you are a gentleman and a scholar!

[GregWeld]

Originally Posted by CamaroMike

Greg you are a gentleman and a scholar!

We've obviously never met....

[96z28ss]

Just got another raise. Ford (F) just raised dividend 25% to $0.125 per share.
I bought some in May of 2012 and kept adding to it thru July 2012. The dividend was $0.05 when I first got some. You just got to love getting these increases, not to mention the growth on share price.