by Gary Alexander
May 27, 2026
A couple of Wall Street journalists assembled the top dozen stocks on the Big Board 130-years ago this week, creating the Dow Jones Industrial Average (DJIA), born May 26, 1896. Charles Dow (1851-1902) and Edward Jones (1856-1920) were also co-founders of The Wall Street Journal and Dow Jones & Co.
In its first 30+ years, the index rose, and fell, and grew in population – first to 20-stocks in 1916, then 30 in 1928. The index began at 40.94-points in 1896, dipped to 30.88 in 10-3, then peaked at 381.17 in 1929 (up 11-fold) but then it fell by nearly 90% to 41.22 in 1932, within a whisker of its first reading in 1896.
Until the S&P 500 began circulating in the 1950s – and then NASDAQ in the 1970s – the Dow was the most widely quoted measure of the market’s health each day, but it was not the first market index, or even the first “Dow” measure. Dow Jones & Company was formed in 1882, and its first index was created in 1884, widely known as the “Railroad Average,” consisting of 11-total stocks, all but two were railroads.
This first Dow index was published daily in a news sheet which morphed into The Wall Street Journal, but first called Customer’s Afternoon Letter. In the mid-1890s, after these rails were “derailed” in the Panic of 1893, Dow Jones decided to diversify – so 12-industrial stocks were chosen to create a wider diversity:
- American Cotton Oil Company
- American Sugar Company
- American Tobacco Company
- Chicago Gas Company
- Distilling & Cattle Feeding Company
- General Electric
- Laclede Gas Company
- National Lead Company
- North American Utility Company
- Tennessee Coal & Iron
- U.S. Leather Company (preferred)
- U.S. Rubber Company
A quick survey of those 12 names makes it clear that most stocks don’t live forever. Only General Electric has remained on the list from 1896 until now – although GE was removed (and then reinstated) twice. Most of these 12 names were merged into other companies, which required Dow to adjust the index.
The Dow digits took on mystic powers, reflected in various phobias about crossing “barriers” like 1,000, 10,000 – and now 50,000. The Dow first reached 995 in 1966 and then retreated from the 4-digit barrier for six-years. It first closed above 1,000 on November 14, 1972, but it took a decade to stay above 1,000.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The Dow first reached 10,000 on March 29, 1999, but it then took almost a decade to stay above 10,000.
Today, the S&P 500 is a much more broadly diversified market indicator for blue-chip stocks, comprised of 11-major sectors and dozens of sub-sectors, while the Russell 2000 reflects small stocks best, and the NASDAQ seeks out tomorrow’s most promising emerging companies and sectors, notably technology. But most investors still look at the Dow first, wondering how many hundred points it gained or lost today.
The question remains – will it take another decade for the Dow to stay above 50,000? I’d say…No. The Dow will likely meet more resistance at six-digits – Dow 100,000 – perhaps sometime in the 2030s.
The Rise of Inflation (and Taxes) in 1913 Cut into the Dow’s Value
The Fed (and income taxes) were born in 1913, prompting a century of high inflation and high taxation draining capital gains, but limiting ourselves to the Dow Jones Industrials as a market metric, we must also examine the Consumer Price Index (CPI), born in 1913 at 10 and now standing at 333, up 3,230%.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The table (above) follows strict decade borders, but if you include the peaks and valleys surrounding those decades, the numbers are more dramatic. There have been three-major (decade-long, or more) bear-markets in the last century, with the first happening during a deflationary decade (the 1930s), helping to lower real losses. Then came the inflationary 1970s, which magnified losses that decade, then the 2000s.
The Three Major Bear Markets in the Dow in the Last 100-Years
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
For balance, here are the three strongest bull-markets in the Dow’s last century. In our nation’s 250-year history, we enjoyed essentially flat prices for nearly two-centuries, before debauching our currency in 1965 (when LBJ ended silver coinage) and 1971 (when Nixon closed the gold window), leading to 10-fold price gains since 1967, but inflation was under control as long as the U.S. followed a gold standard.
So far in the 2020s, the Dow is up 172%, from a low of 18,760 in March 2020 to 50,600 now, so we may be able to cite another Roaring 20s decade at the end of 2029, but that depends on our political choices.
The Dow may be outdated and limited in scope, but I’m still waiting for the day when news reports lead with the S&P 500 (now at a rather mundane level of 7,500 or so) instead of citing the Daily Dow data.
Navellier & Associates; do not own General Electric Inc. (GE) in managed accounts. Gary Alexander does not own General Electric Inc. (GE) personally.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
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A Look Ahead by Louis Navellier
Nvidia’s Stunning Earnings Wrap Up Quarterly Earnings Season
Income Mail by Bryan Perry
One Big Beautiful Buying Opportunity in Gold
Growth Mail by Gary Alexander
Happy 130th Birthday, Dow Jones Index
Global Mail by Ivan Martchev
A Week of Giant IPOs and Chip and Memory Shortages
Sector Spotlight by Jason Bodner
The IPO That Tells You What Comes Next
View Full Archive
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About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20-years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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