A price-weighted index is one in which the value of the index is calculated by simply summing up the prices of each of the stocks in the index and then dividing by the total number of stocks within that index.
The Dow Jones Industrial Average is a price-weighted index of 30 blue chip stocks. Here at Dogs of the Dow we have an entire section devoted to the Dow Jones Industrial Average. It is simply entitled ‘the Dow‘ and it includes in-depth descriptions, tables, and a slew of charts.
Related Terms: Dow Jones Industrial Average (DJIA) – Dow Divisor – Capitalization-Weighted Index – Standard and Poor’s 500 Index – S&P 500