Can you buy Dow Jones stock?
You can't buy stock in the Dow Jones Industrial Average itself, but you can get exposure to the Dow and the companies included in the index.
Your investment options include:
1. Buy shares of all 30 companies included in the Dow Jones Industrial Average.
With only 30 companies in the index, it's possible to directly purchase each stock in the Dow. Most brokers don't charge commissions on trades, and many allow fractional share investments, meaning you can buy partial shares.
This investment alternative requires you to manage 30 separate stocks and make changes to your portfolio whenever the index changes (although, historically, the index only changes every couple of years).
2. Buy shares in a Dow-focused ETF
Exchange-traded funds (ETFs) that track the Dow's performance, such as the SPDR Dow Jones Industrial Average ETF (DIA -1.03%), will get you invested in the 30 companies listed in the Dow. Buying shares in an ETF is simpler than investing in 30 separate companies, and you won't have to make changes to your portfolio when the companies listed by the Dow change.
As with most ETFs, an annual expense ratio -- a management fee -- is assessed by this ETF. The expense ratio of 0.16% works out to a fee of $1.60 per year for every $1,000 invested.
3. Invest in Dow options or futures contracts
You can buy Dow options contracts through the CBOE Global Markets options exchange and Dow futures contracts using the CME Group's (CME +0.35%) Chicago Mercantile Exchange. These types of securities are best suited for experienced investors since trading options and futures can be risky.
For novice investors who want portfolio exposure to a wide range of sectors through familiar large-cap stocks, the Dow Jones Industrial Average represents a good starting point for your research. That's especially true if you're seeking to invest in blue chip companies, which are generally the most stable and profitable on the market.
