You cannot invest directly in an index like the Dow, but you can invest in Exchange Traded Funds ETFs or mutual funds that track the index. There is always a cost to access investments, but when selecting a Dow index fund or any other fund, make sure you limit the cost as much as possible. That keeps more in your pocket to compound over time.

You cannot buy the DJIA index directly.

However, you can buy the components of the DJIA to replicate the index. The DJIA reflects the average price of its 30 component stocks.

Hence you can buy each of the 30 stocks to construct a mirror of the index. You can also buy an ETF that mimics the DJIA index. The DJIA is an index. There are ETFs and mutual funds that try to mimic the DJIA by holding the securities that are in the DJIA. You cannot buy shares directly in the index, but you have several options to mimic the index some more precise than others:.

Because of the numerous splits and reverse splits, etc. The Divisor accounts for the cumulative value of splits and reverse splits over time, to keep a proper representation of index performance. But, if you just want to replicate index performance, you can simply create a portfolio comprised of the 30 stocks included in the dow, namely: DIA takes the cake.

It is also the one index that seeks to completely mimic the index composition, so the only tracking error or difference in ETF returns vs.

Where can I find all of the stocks in the Dow Jones Industrial Average?

DIA is the largest and most liquid tracking fund. Tracking error SPECIFICALLY FOR THE DJIA, not to be confused with ETFs tracking other indexes with different weighting methodologies or asset classes, is primarily driven by the expense ratio of the ETF, as the Dow is otherwise relatively easy to replicate.

You simply buy all 30 stocks that comprise the index, and re-balance where necessary. If we want to find a way to essentially "invest in the DJIA," which is a non-investable benchmark index, we can get the exact returns on a long position in the DJIA as if it were investable , magnified by 5x, by taking a long position in the E-mini DJIA futures contract.

Futures on the DJIA trade quarterly, with nearly all the trading volume taking place in the nearest expiration month. Downside is limited only to the premium you pay for the option if you think the index will rise, you buy calls; if you anticipate it will fall, you buy puts , giving you a beautifully asymmetric trade weighted to the upside.

Losses are capped at the option premium, while gains are magnified by leverage and are theoretically unlimited.

DJIA - Dow Jones Industrial Average - MarketWatch

Of course, for those unexperienced with trading, be sure to understand how options work before executing any positions as these can be considered risky investment vehicles. The symbol for this ETF is: If you do not yet have an account, check into some of these popular options: Dictionary Term Of The Day. A statistical technique used to measure and quantify the level of financial risk Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin?

This Mistake Could Cost You. Guides Stock Basics Economics Basics Options Basics Exam Prep Series 7 Exam CFA Level 1 Series 65 Exam.

Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. Most Helpful Most Recent. Halpern, Ted Ashburn, VA.

The expense ratio is how managers who select, buy, and sell the stocks and bonds in a Mutual Fund or Exchange Traded Fund are compensated. Expense ratios are included in the price of both types of funds, so often people are unaware of how much they are really paying Transaction fee: There are funds that trade with no transaction fee. These funds vary by where your account is held. Free Consultation Was this answer helpful?

Chen, Chris Waltham, MA. However, you can buy the components of the DJIA to replicate the index The DJIA reflects the average price of its 30 component stocks. Anderson, Scott Newport Beach, CA. Muhleman, Emma San Francisco Bay Area, CA.

You cannot buy shares directly in the index, but you have several options to mimic the index some more precise than others: Rupert, Alexander Cleveland, OH. TD Ameritrade Charles Schwab E-Trade Fidelity.

DIA SPDR® Dow Jones Industrial Average ETF ETF DIA Quote Price News

Investopedia does not provide tax, investment, or financial services. The information is not meant to be, and should not be construed as advice or used for investment purposes. While Investopedia may edit questions provided by users for grammar, punctuation, profanity, and question title length, Investopedia is not involved in the questions and answers between advisors and users, does not endorse any particular financial advisor that provides answers via the service, and is not responsible for any claims made by any advisor.

Investopedia is not endorsed by or affiliated with FINRA or any other financial regulatory authority, agency, or association. All Rights Reserved Terms Of Use Privacy Policy.