(Source: Bloomberg)
The first American stock market index, the Dow Jones Transportation Average (DJT), was constructed in 1884, predating the now widely cited Dow Jones Industrial Average (DJI), constructed in 1896. The indices construction was premised upon increased market visibility, as readily available stock prices and market information were not commonplace. Business executives often had incentives to withhold information from investors and the lack of regulatory reporting requirements supported the lack of transparency; leaving many investors unwilling to participate in financial markets. (One the Economic Consequences of Index-Linked Investing