DOW 101: For Students
By Anne Squire
News Writer
Music majors study music theory and nursing students study anatomy. In a college setting, students are required to pick a major and then study it in-depth.
Amidst the focus on specific majors, students overlook the importance of what is transpiring in the world outside of UVU, especially when it comes to watching the economy.
One aspect of the economy students may not pay attention to, is the stock market. One may hear phrases such as “The DOW lost today” or “The DOW gained” but it takes basic understanding to know what these phrases mean.
For starters, the DOW Jones is an index, or a grouping of 30 major companies’ stock. The companies included in the DOW are not fixed, and companies can be booted if they do not meet certain choice criteria.
Current members include Walt Disney, Wal-Mart, AT&T and Microsoft, to name a few. The DOW’s oldest members are ExxonMobil and Proctor & Gamble.
The DOW is closely watched throughout the world because it reflects the state of the U.S. economy, which influences all of the world.
The purchase of stocks from these companies will show how confident investors are in our economy.
Dr. Amir Kia, an economics professor in the Woodbury School of Business, says that the DOW is what investors think about the economy based on how they buy or sell their stocks.
While there are some cases of speculative investing, more often than not the investments made into these major companies are quite calculated.
“Investors in the market are highly educated. The DOW can reflect [their] expectation in the future,” Kia said.
The health of the economy can be read in the overall change of the DOW, not in the day-to-day changes.
“Short term [movement] doesn’t always reflect the movement of the economy,” Kia said.
Paying attention to the overall trends is more important than daily movement; however, it is the day-to-day gains and losses that make up the economy.
Students, professors, or community members may wonder how the DOW applies in their life, and why they should pay attention to the DOW. For investors, watching the DOW is extremely applicable to their career.
Why should a student at UVU care about the DOW? Kia mentions a few reasons why it is applicable.
“A knowledge about the DOW is important if [students] want to know market expectations and the future of the economy,” Kia said. “Knowing what is happening in the economy helps you to do better in interviews for jobs.”
This type of knowledge shows employers that a student’s focus is outward, on the real world thus enhancing their marketability.
Kia says that it is also important to know as a consumer, helping people decide when to buy or sell cars, houses, or property.
“No matter what your social status, income or education, be aware of what is going on in the economic world,” Kia said.
A well-educated person does not focus merely on their major, but rather, on the movement of the world around them.
