Dow Jones Index (Dji) Not A Good Measure Of The Us Economy

758 words, 4 pages

Intro Sample...


UGBA10

The Dow Jones Index (DJI) is a powerful tool that serves as an indicator of the state of the US Economy. This correlation can be made if the performance of the DJI is compared to that of the US GDP. This is supported by the fact that the growth rates between 2010 and 2011 for both measures were very similar. The growth of the US GDP was 3.3% while the growth of the Dow Jones was 5.5% (1,2). Although the Dow Jones serves as an effective measure of the US Economy with its direct correlation to GDP fluctuation, it does not incorporate a good selection of representative companies.
For example, Bank of America, the lowest performing stock in the Dow Jones, should be dropped from the DJI because it does... View More »

Body Sample...


The committee should, however, continue to choose companies that they think would be able to sustain economic stability over a long period of time. This encompasses the very essence of what a blue chip company is, which is a significant criteria for companies to be in the DJI. Lastly, companies that are chosen should be companies that have an impact globally, not just in the US. The DJI is a financial indicator used by investors around the world, as companies on the list effect countries globally, so more attention should be paid to picking companies that effect the world as a whole.
Overall, the Dow Jones Index is an effective measure of the state of the US Economy. However, there is still a need for reform with regard to the different companies representing the economy in the index. With Google added, the index would better measure the emerging technology industry, and its importance in the future of the US economy. In addition, more immediate measures should be taken and more concrete evaluation procedures should be instilled, to account for these emerging companies.
Works Consulted
1. “2010 World GDPs” http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf
2. “Historical and Future GDPs” http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/weorept.aspx
3. “Definition of Blue Chip companies” http://www.investopedia.com/terms/b/bluechip.asp#axzz1p3NX2M7t
“What is the DJI?” http://www.investopedia.com/terms/d/djia.asp#axzz1p3NX2M7t
...

Read More

Related Essays on Dow Jones Index (DJI) Not A Good Measure of the US Economy

  • Special Economic Zones In India

    21349 words, 86 pages

    Introduction to Economic Zones “Export else perish “ these are the words of first Prime Minister of India Pt. Jawaharlal Nehru. India being a continent like country having 30 states, more than 1000 languages and world second largest man power having diversified natural conditions right from Rain Forests of Kerala, Ice Mountains of Himalaya, Runn of Kuch to productive land of Bramahaputra has great potentials of world class export worthy products from various industries like Agriculture, Engineering, Chemicals, Software’s, Gems and Jewellry, Pharmaceuticals, Bio technology and many more.

    View Document »

    Economic Reform In China Post 1978

    2356 words, 10 pages

    First of all I will discuss China’s historical background and its need for reform and also how economic reform started out in 1978. Then I will go on to cover the four major economic institutions that needed to be reformed in order for China to become a market economy. These four major economic institutions will then be discussed in detail. This paper will then go briefly into China joining the WTO and will conclude with China’s economic situation at present. Chinese economic policies and institution have undergone a number of extreme changes since the establishment of the Communist regime

    View Document »

    Using Neural Networks To Forecast Stock Markets

    7649 words, 31 pages

    Using Neural Networks to Forecast Stock Market Prices Abstract This paper is a survey on the application of neural networks in forecasting stock market prices. With their ability to discover patterns in nonlinear and chaotic systems, neural networks offer the ability to predict market directions more accurately than current techniques. Common market analysis techniques such as technical analysis, fundamental analysis, and regression are discussed and compared with neural network performance. Also, the Efficient Market Hypothesis (EMH) is presented and contrasted with chaos theory and

    View Document »

    Buddhist Economics: Dethroning Capitalism

    5028 words, 21 pages

    EALC120 Buddhist Studies C120 Introduction Economics are principles that surround the entire world. They are principles that people in all industries, fields, and income levels are effected by. They play an important role in how many individuals live and how different countries’ governments operate. Mainstream economics in its entirety is now seen as something very controversial because of the widespread environmental devastation and socioeconomic disparity globally. Many argue that mainstream economics are a tool of the wealthy and the politically powerful, and that

    View Document »

    Operational Effectivess

    4547 words, 19 pages

    Most of the company’s have a performance measurement and management system which deals with enhancing the performance of individuals or operations in a company, may it be a manufacturing or a non- manufacturing company. Performance measurement (PM) is a useful tool that helps the company reach its goals, and goals are straightforwardly described by Goldratt as, “the goal of a firm is to make money’, and without the right performance of individuals and operations, it cannot reach its goals. (TXTBK OPERATIONS MGT FOR COMPETITIVE EDGE). First will define PM, and explain the use of PM in comtemp

    View Document »

    Information Systems

    1573 words, 7 pages

    Chapter 1 Information Systems backbone Why is Information systems considered as company’s background? This section of report is focused towards the primary goal of the research i.e. Why is information systems considered as a backbone of any organization. Secondary data is used to prove the primary aim of report. Information systems perform three vital roles in any type of organization: 1. Support business operations 2. Support managerial decision making 3. Support strategic competitive advantage Ref: http://csob.berry.edu/faculty/lleblanc//newpage31.htm How information system is int

    View Document »

    Fiscal Cliff Impact And Decisions

    1582 words, 7 pages

    ECON 1 With the “Fiscal Cliff” coming close, it is important that we take a look at the effects of different kinds of cuts and increases in spending and taxes will have on the economy. The decisions that the Congress makes is very important because we are at a time where increasing GDP is very important to US recovery, as the US is just coming out of recession. Many believe that if no action is taken regarding the fiscal cliff, then the US will spiral back into recession, especially because GDP will drop so much. This is because a $600 billion dollar cut will have an

    View Document »

    Carrefour- A Comparison Of The Behaviour Of Carrefour In- And Outside China In Terms Of Csr

    9540 words, 39 pages

    Carrefour- a Comparison of the behaviour of Carrefour in and outside China in terms of CSR - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Table of contents - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Executive summary I. Chapter – Introduction 1. Purpose of the Study 2. Objective of the study 3. The setup of the study II. Chapter – Carrefour’s position in China 2.1 Chinas retail market at a glance 2.2 Carrefour’s role in China III. Chapter – The purpose of CSR for multinational compa

    View Document »

    South Africa

    5710 words, 23 pages

    Executive Summery This is a country notebook on the country South Africa. There are so many different issues and facts about this country that very few know about. South Africa has had its ups and downs mostly because of racial issues that have been within this country for years. I have taken the time to look up some very important information about this country. Some of the information I found was very disturbing, but I had the opportunity to learn about it. In this section of the county notebook some of the information and relevant facts that I found where based on South Africa’s histo

    View Document »

    Students And Prewriting

    3378 words, 14 pages

    The writing process is composed of many interrelated and equally important steps – Prewriting, Drafting, Writing, and Revising. All of these stages build off one another and guide students towards a polished final product. However, studies show that students do not necessarily devote an equal amount of time and energy to all parts; in fact, most students will only focus on one or two of the four proposed steps. One step in particular that is heavily neglected is the prewriting step. There are a number of reasons why students often opt out of this particular step, but this research paper will e

    View Document »

More Popular Essays

Research help is just moments away!