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Posted: 11/19/2008 7:44:40 PM EDT
Can someone explain in laymans terms this "The Dow plunged 400 points" and " The Dow closed at under 8,000 today" crap we're hearing about on the news,
Link Posted: 11/19/2008 8:00:35 PM EDT
Link Posted: 11/19/2008 8:14:25 PM EDT
Basically, 1 point is $1.00. So, the "index" was down $400.00.

The Dow Jones Industrial Average is a index, of the 30 most widely held stocks. They are "weighted" according to a formula. If you were to buy the entire index (as it is weighted) it would now cost you $7997.00 at the close of the market today.

It is used as a barometer of the overall market. Other indexes are the S&P 500, S&P 400, S&P 600, Nasdaq 100 etc.
Link Posted: 11/19/2008 8:31:20 PM EDT




That was a good read, thanks. It is interesting to view todays DJIA from the perspective of history.

This is the part that todays investors need to internalize:

The crash of 1929 and the ensuing Great Depression returned the average to its starting point, almost 90% below its peak, by July 8, 1932, at its intra-day low of 40.56; closing at 41.22. The high of 381.17 on September 3, 1929, would not be surpassed until 1954, in inflation-adjusted numbers.
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