Friends who frequently work in the financial industry may already have some understanding of the Dow Jones Index. Essentially, it is a type of average stock price index. This explanation might still be a bit vague for those unfamiliar with it, so let’s delve deeper into what the Dow Jones Stock Index really is.

1. The Dow Jones Index
   The Dow Jones Index is an arithmetic average stock index. In other words, it is an average stock price index created by the founder of Dow Jones & Company back in 1884. Because this index has been widely used in the stock market for a long time, it is simply referred to as the Dow Jones Index. This index holds significant influence and is the most widely used stock price index in the market, serving as a highly representative benchmark in the New York Stock Exchange.

2. Composition of the Dow Jones Index
   The Dow Jones Index consists of four categories:

• An average index calculated based on the stocks of 30 well-known industrial companies;

• An index compiled from the stocks of 20 prominent transportation companies;

• An average index derived from the stocks of 6 utility companies;

• And a composite average index based on all the stocks involved in the above three average indices.

Together, these form the Dow Jones Index. The calculation formula for the Dow Jones Index is essentially the average stock price, which equals the sum of the stock prices divided by the number of stocks. As an arithmetic average index, it is highly representative and widely recognized both domestically and internationally.

"Dow Jones" refers to a person—the founder who created this average index. Among the most well-known Dow Jones indices are three major ones, with the Dow Jones Industrial Average being the most frequently mentioned. Different indices represent different industries and carry varying reference values and bases. Therefore, when making final references, investors should consider the type of stocks they are selecting.

Through the above introduction, we hope you now have a better understanding of the Dow Jones Index. In the stock market, it is essential to be aware of these relevant indices to make informed stock selections—a crucial aspect of stock trading. Only by referencing the Dow Jones Index can investors make accurate stock choices. However, investing in the stock market also requires caution regarding risks, and one must have the ability to bear such risks.