Let me guess, you have heard of Charles Dow theory and do not know who he was. This article is for you to read. In this article we will talk about who was Charles Dow and his theory.
Who was Charles Dow?
Charles Dow is an American financial journalist who co-founded Dow Jones & Company with Edward Jones and Charles Bergsturtzer. He pioneered the development of the Wall Street Journal and the Dow Jones Industrial Average.
Charles Dow developed Dow Theory, an analysis of maximum and minimum market movements and the basis for technical analysis. Dow died on December 4, 1902.
Dow Jones Industrial Average
In 1882, Charles Dow and Edward Jones founded Dow, Jones & Co., a financial news agency, with funding from a silent partner, Charles Bergstler (Charles Bergstresser).
The bureau released The Client's Afternoon Letter, which garnered a circulation of over 1,000 subscribers. The predecessor of the Dow Jones Industrial Average appears in the mini-newsletter as an average of nine stocks in the shipping and railroad industries, giving readers an idea of whether the market is up or down.
By 1896, the first DJIA was calculated using the top 12 stocks on the market. The original calculation was simple addition and division, yielding 40.94 as the first published average.
What is Dow Theory?
The theory explains how investors use the stock market to understand the health of the business environment. This is the first theory to explain how the market moves with trends. While the stock market has changed a lot over the years, the basic tenets of Dow Theory still hold.
Dao never wrote his ideas into a concrete theory, nor did he call them that. Still, many learned from him through his editorials in the Wall Street Journal. After his death, other editors, such as William Hamilton, refined these ideas and used his editorials to integrate what is now known as Dow Theory.
What are the 3 trends of the Dow Theory?
Dow Theory asserts that major market trends consist of three phases: accumulation phase, public participation (or absorption) phase, and distribution phase.
So I hope now you will know who was Charles Dow and what is Doe Theory. Charles Dow influenced the world of financial investing through the creation of The Wall Street Journal and the Dow Jones Industrial Average. His Dow Theory remains the standard for market analysis.
