Dow Theory

Dow theory is named after the 19th century editor of the Wall Street Journal, Charles Dow. It is often used as an indicator of when a bear market may be about to start.

The idea is that when a downward trend in the Dow Jones Industrial average is confirmed by a downward trend in the Dow Jones Transportation average, firms are no longer shipping goods between each other, which indicates slowing activity and means that a new bear market has begun.

• See Tim Bennett’s video tutorial: What is an index?

MoneyWeek magazine

Latest issue:

Magazine cover
Don't be spooked by Putin

Take a punt on eastern Europe

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues
Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.