Mar 26, 2017

History Lesson: The Dow Jones Industrial Average Since 1896 In One Chart

Great infographic showing the price action for the Dow Jones Industrial Average over the past 130 years with historical milestones along the way (click on the graphic to enlarge it):

history_of_market_corrections2-hires

Questions for students:

  • Do some additional research to find the companies that were in the Dow in 1896 and those that are currently in the Dow?
  • Why do you think the chart has the title “Human Innovation Always Trumps Fear?”
  • What was the longest period of time that it took the market to recover for a sharp drop or from a period of no growth?
  • Pick three historical events that you think had the GREATEST impact on the Dow Jones during this period? Describe why you think they impacted the index.
  • The Great Recession is generally considered the worst economic downturn since the Great Depression. Does the performance of the Dow Jones confirm that?
  • Calculation: What if your distant relative had invested $5 in the Dow Jones in 1896 and left it for you to inherit. How much would it be worth today?

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Looking for investing lesson ideas? Check out our activity “Joining the Market.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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