Index Investing: The Wilshire 5000 Total Market Index
If you thought the S&P 500 and Nasdaq Composite Index included a lot of companies the Wilshire 5000 Total Market Index is an even larger one. Contrary to what its name suggests, the Wilshire 5000 Index contains over 3,500 stocks that trade in the U.S. Investors often refer to the Wilshire as the "total market index" because it wasdesigned to measure the entire U.S. stock market.
|Created By:||Wilshire Associates in 1980.|
|Number of Companies:||3,000 ~ 5,000|
|Types of Companies:||All U.S. equity securities with readily available price data.|
|Selection Criteria:||All primary equity issues for U.S. companies trading on a U.S. exchange with readily available prices. Bulletin board, ADRs, preferred, mutual funds are excluded.|
|How it\'s Calculated:||The Wilshire Total Market Index is market-capitalization weighted.|
|Advantages: It covers virtually all of the public companies in the U.S.|
|Disadvantages: The Wilshire only contains companies headquartered in the U.S., leaving out many foreign companies. It is also similar to the S&P 500 in the sense that the top 10% of the companies in the index account for over 75% or so of the index\'s value.|
|Investing: You can buy mutual funds and ETFs that represent this index.|
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