What is the total market index?
The total market index is compilation of publicly traded companies with the offer of stock capital on the main exchanges of a particular country. Dear List performance is used by the financial industry as a measure to monitor the risk and yield of the whole market. Various financial companies, such as Standard and Poor's (S&P), publish a total market index that allows investors and financial analysts to take investment decisions and evaluate the performance of the stock portfolio or mutual fund against the performance of the market as a whole. The index usually includes all or almost all publicly traded companies based in this country, issuing shares and listed on the country's main exchanges. For example, the total market index Russell/Nomura contains data from 98 percent of companies listed on the Japanese Stock Exchange. Because the total market index evaluates the performance of the entire market, it is often cited as a hint of investors' trust in the country's economy.
In the US, Wilshire 5000 and the total S&P market are two of the most referenced total market indices. The public company is included in the index if the company is based on the US, issues shares and is listed on exchanges in New York, American or Nasdaq. However, all companies included in the index do not matter in the compound value analysis. The contribution of each company to the total price of the index is weighed, so some companies have a greater impact on the fluctuating price of the index than other companies.
The index can choose a wide range of methods of weighing companies included to determine the total price of the index. The standard total number ofindex is usually used by the paradigm of market capitalization, which brings greater weight to larger companies that have the largest market share. For example, the 500 of the largest companies of more than 6,000 companies listed on the Wilshire 5000 include more than 70 percent of the total index. Wilshire 5000 as well as other total market inDexes come in multiple versions that use different weighing methodologies, including the price of weighted, float-repaired and the same weights that differ depending on how supplies and dividends are treated in valuation.