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| Some Definitions about Day-Trading / Part 4 |
| About INDICES ! |
| WILSHIRE 5000 |
Overview
The Wilshire 5000 is considered the "total market index." Designed to track the value of the entire stock market, the index was started in 1974 by Wilshire Associates
soon after computers made the daily computation of such a large index possible. Though it is the nation's broadest-based index, and probably the most accurate
broad" a definition of the market. Most practitioners prefer to use the S&P 500 as a proxy for the overall market, especially since it encompasses 70% of its market
value. The remaining 30% of the market, which consists primarily of small-cap stocks, is generally considered to be represented by the Russell 2000 Index.
Composition
The Wilshire 5000 is comprised of virtually every stock that meets three criteria:
1) The firm’s headquarters are based in the U.S.
2) The stock is actively traded on a U.S. exchange.
3) The stock has widely available pricing information (this disqualifies bulletin board, or over-the-counter, stocks).
Though the index started with--as the name implies--5,000 firms, it actually contains around 6,700 today. The index is market cap weighted, meaning that the firms
with the highest market value account for a larger portion of the index. In the chart below you can see that the top 10 firms make up a very disproportionate 17% of the
index's total value.
The Wilshire 5000 is considered the "total market index." Designed to track the value of the entire stock market, the index was started in 1974 by Wilshire Associates
soon after computers made the daily computation of such a large index possible. Though it is the nation's broadest-based index, and probably the most accurate
broad" a definition of the market. Most practitioners prefer to use the S&P 500 as a proxy for the overall market, especially since it encompasses 70% of its market
value. The remaining 30% of the market, which consists primarily of small-cap stocks, is generally considered to be represented by the Russell 2000 Index.
Composition
The Wilshire 5000 is comprised of virtually every stock that meets three criteria:
1) The firm’s headquarters are based in the U.S.
2) The stock is actively traded on a U.S. exchange.
3) The stock has widely available pricing information (this disqualifies bulletin board, or over-the-counter, stocks).
Though the index started with--as the name implies--5,000 firms, it actually contains around 6,700 today. The index is market cap weighted, meaning that the firms
with the highest market value account for a larger portion of the index. In the chart below you can see that the top 10 firms make up a very disproportionate 17% of the
index's total value.
General Electric
Microsoft
Exxon Mobil
Pfizer
Citigroup
Wal-Mart Stores
Intel
American Intl. Group
Cisco
IBM
Microsoft
Exxon Mobil
Pfizer
Citigroup
Wal-Mart Stores
Intel
American Intl. Group
Cisco
IBM
GE
MSFT
XOM
PFE
C
WMT
INTC
AIG
CSCO
IBM
MSFT
XOM
PFE
C
WMT
INTC
AIG
CSCO
IBM
E-Mail : Herman.Bogaerts@Wanadoo.fr --- Herman_Bogaerts@Yahoo.com
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