The stock market is a complex beast, and if you want to make money off of it, you need to know how to navigate it. In this blog post, we’re going to take a deep dive into how to compare the Nasdaq index vs Dow Jones. We’ll look at their historical performance, and the factors that affect their performance, and do a numerical comparison of the two. By the end of this post, you should have a good understanding of how these two important stock indices work.
What are the Nasdaq Index and the Dow Jones?
The Nasdaq Index is a stock market index that includes over 3,000 companies and is one of the most widely followed indices in the world. The Nasdaq is made up of both large and small-cap stocks and is heavily weighted toward Vested companies.
Definition of the Dow Jones.
The Dow Jones Industrial Average (DJIA) is a stock market index that includes 30 large-cap companies that are leaders in their respective industries. The DJIA is one of the oldest and most well-known indices in the world.
Historical Performance of the Nasdaq Index and the Dow Jones.
The Nasdaq Index is a market-capitalization-weighted index of the largest non-financial companies that trade on the Nasdaq stock exchange. The index includes over 3,000 companies, with the top 10 companies comprising 20% of the index.
The Nasdaq Index was created in 1971 and it first traded above 1,000 in February 1998. In March of 2000, the Nasdaq reached an all-time high of 5,132 before collapsing during the dot com crash. The index bottomed out in October 2002 at 1,114 and then began a slow climb higher. The global financial crisis caused another sell-off in 2008 and 2009 but the index has since recovered and hit new all-time highs in 2015 and 2018.
Performance of the Dow Jones Industrial Average (DJIA).
The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 blue chip stocks that are traded on the New York Stock Exchange (NYSE). The DJIA was created by Charles Dow in 1896 and it is one of the oldest and most widely followed stock market indices in existence.
The DJIA reached its first 1,000-point milestone in 1966 and its second 1,000-point milestone in 1987. In 1999, the index crossed 10,000 for the first time ever and then less than two years later it topped 11,000. The DJIA fell sharply during the dot com crash but it quickly recovered those losses and continued to rise throughout most of the 2000s. Like many other stock markets around the world, 2008 was a difficult year for the DJIA but it has since recovered those losses and hit new all-time highs in 2013 and 2018.
