The difference between Dow Jones and Nasdaq is location, size and type of investments. Both are involved in indexing and measuring stocks and bonds. Dow Jones is primarily know for its review and it’s measurement and quality of stocks while Nasdaq exists wherever it’s communication media allows it to exist and it’s primarily for those ready to buy. As for prestige, Nasdaq is lower than Wall Street; Wall Street has a regular address and Nasdaq exists on the Internet.
Dow Jones Average is the gold standard for Wall Street investors. It uses the top thirty companies that are stable and are conducting business in the right way, hefty earnings, balanced accounts, long record of success, etc, and uses these as guidelines for investors to follow. It is connected with the Wall Street, has a big board with all kinds of visible activity, and it also can be assessed online. The Nasdaq, on the other hand, has more than 4,000 stocks to list , and is on a lower rung of trading than is DOW. The main difference between Dow Jones and Nasdaq is functional as well as geographical.
Dow Jones and Nasdaq are both investment indicators and give creditable reviews of the economy. Dow Jones is a measuring tool for large businesses and Nasdaq lists stocks for sale. Only a handful of Nasdaq stocks are listed on the New York Stock Exchange since requirements are listing on these two well known trading companies differ. Wall Street stocks are mostly from companies that follow closely the Dow Jones average ratings. When investors are trying to make decisions about which companies to invest in, they study closely the Dow Jones Average reports to help them decide.
The Wall Street Journal, that prestigious New York newspaper that daily prints out investment stories, guidelines, and facts and figures, are the keepers of the Dow Jones Industrial Average (DJIA) report. Is it infallible? Of course not. It works on the information that is given, and when some of the facts are not facts, but are pseudo facts, then how are they to know the difference. They don’t. When investors believe these and act on them, sometimes dire consequences happen.
An example of that is the fraudulent way in which investing took too many wrong turns in the latter part of 2008 and collapsed the up to then, thriving economy. Because of that, the Dow Jones Average reports and investors in general, whether they are working with stocks on the NYSE (New York Stock Exchange) or the NASDAQ (National Association of Securities Dealers Automatic Quotations) are now more aware of what can go wrong when greed takes over common sense.
But the main difference, once prestige and influence is out of the picture, is that the Nasdaq is traded solely on the Internet. They have no prestigious floor such as the NYSE does, but maintain somewhat more frugal offices. Their index, which is comparable to the Dow Jones Average, at least in some ways, is a measure of how well the investing market is doing. It is this that causes people to confuse them with the DOW.
It is important to distinguish between these two investing concerns in two ways, at least when comparing them and trying to discern their differences: One, the statistics that make up the Dow and Nasdaq Composite are to be used only as guidelines and aren’t places where one can trade, they are guidelines and learning tools. Too, the investing companies are different in their ways of conducting business. Investors of varying degrees of knowledge can buy and sell on Nasdaq, while Wall Street investors mainly work through brokers.