The Complete History of the Dow Jones Industrial Average2015-06-24
The Dow Jones Industrial Average is one of the oldest and most used benchmarks across the globe. Consisting of 30 of the biggest companies in the world, the benchmark has been through a lot since it was founded in the late 19th century. Here is a quick primer on the history of the DJIA, by the numbers.
Decade by Decade
The index has put in a dozen full decades with a few years to spare on the side. Over that time period, the Dow has seen just three decades of negative returns, giving it a 75% chance of turning in a positive decade.
*2010s data as of 5/22/2015
While the above chart does well to outline some of the most prosperous and most catastrophic 10-year stretches, looking at the index’s annual price gives investors an idea of just how much it has soared in recent years.
Visualized another way, here’s a look at the daily performance of the Dow since its inception (note the significant increase in volatility in the late 20s and 80s).
Here’s yet another way to look at the daily historical volatility of the DJIA.
The Best and Worst
Starting with monthly returns, we outline some of the impressive and most treacherous stretches the index has ever seen.
The DJIA has seen years where it has fallen as much as 52% and others where it has gained more than 80%.
- The Dow Jones Industrial Average Index was shut down from 7/30/1914 to 12/12/1914 because of World War I.
- It took the index 31,728 days from its inception to cross the 1,000 mark. It took just 36 days to move from 10,000 to 11,000.
- It would take just 44 of the Dow’s best sessions (by point gain) to go from 0 to its close on 5/22/2015 of $18,232.02. By contrast, it would take just 38 of the Dow’s worst sessions (by point losses) to bring that figure back to 0.
- Since inception, the Dow has had just one down year that ended in a “5″, as it suffered a slight pullback in 2005.
While the DJIA itself is difficult to invest in, investors can easily utilize the Dow Jones Industrial Average ETF (DIA ), the only fund to grant exposure to the standard DJIA. The fund has well over $11 billion in total assets, making it one of the largest and most liquids ETFs in the world.
The Bottom Line
The Dow Jones Industrial Average is one of the oldest and most prominent investing benchmarks in the world and figures to stay that way for generations to come.
All data as of 5/22/2015.
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Disclosure: No positions at time of writing.