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They say that diamonds are a girl's best friend. Well, they could also be someone's best friend or worst enemy—depending on the state of the Dow Jones Industrial Average (DJIA). DIAMONDS, another example of index shares, provide investors with the diversity of 30 blue chip stocks in the convenience of one investment. DIAMONDS are securities that consist of the stocks represented in the Dow Jones Industrial Average, and take their moniker from their ticker symbol, "DIA."
These securities closely mimic the performance of the Dow Jones Industrial Average, so that their values rise and fall in relation to fluctuations in the DJIA. Like spiders and other index shares, DIAMONDS are traded like stock on the American Stock Exchange.
The Dow Jones Industrial Average includes some of the most prestigious companies in the United States. An investment in DIAMONDS is an investment in these 30 blue chip companies. Keep in mind, however, that blue chip stocks are subject to business cycles just like all companies. The following companies currently make up the Dow Jones Industrial Average:
Perhaps a more exotic index share is WEBS. We'll learn about these securities next.