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Learning to take stock of market indexes

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Stock indexes measure price fluctuations among stocks. By following the appropriate stock market index, you can compare the performance of your stocks to similar types of stocks within a particular index.

• The Dow Jones Industrial Average — The Dow Jones Industrial Average (DJIA)* is the figure most often referred to on the news when the market’s daily activity is recapped.
The DJIA is a price-weighted index of 30 major companies, such as McDonald’s, Walmart and General Electric. As a result, high-priced stocks have much more of an influence on the index than low-priced stocks.

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