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Wilshire 5000 Equity Index

The Wilshire 5000 Equity Index is a benchmark index made up of all U.S. stocks regularly traded on the three major U.S. exchanges (the New York Stock Exchange, the American Stock Exchange, and the Nasdaq).

Expanded Definition

The name Wilshire 5000 is misleading since there are now more than 7,000 companies traded on the three main exchanges.

The Dow Jones Wilshire 5000 Total Market Index, also known as the Dow Jones Wilshire 5000 Composite Index, Wilshire 5000 Equity Index, or just the Wilshire 5000, is a measure of the entire U.S. stock market. It includes all U.S.-based securities with readily available price data, making it by far the broadest index. Although it leaves out foreign securities, which many investors consider essential in a diversified portfolio.

Component stocks come from NYSE, Nasdaq, and AMEX. The Wilshire 5000 was created in 1974 by Wilshire Associates Inc., which now calls itself a "global advisory company specializing in investment products, consulting services, and technology products." The index's ticker is DWC.

The member stocks of the Wilshire 5000 are weighted according to market capitalization. Its base total-market capitalization is $1,404.596 billion, from Dec. 31, 1980. The index updates its members monthly. An IPO, for instance, might bring a new stock into the index. A delisting might get a stock bounced from the index.

Some critics point out that since the index is weighted by market cap -- the 500 largest companies comprise more than 70% of the index's value -- total performance is weighted toward the top few companies. Index funds tracking the stocks in the Wilshire 5000 can be purchased, but costs may be high as it involves so many securities.

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