Long Term Perspective

The Wilshire 5000 is the most comprehensive of market indicators. It includes all publicly traded U.S.-based companies - now more than 7000. Despite the drop in the index in 2000 and 2001, the 10-year average annual growth was solid at 11.4 percent.

Short Term Perspective

The Wilshire 5000 has received renewed market attention ever since Federal Reserve Chairman Alan Greenspan cited it among his economic tool chest. It is widely monitored by Fed officials because this index indicates the pattern of consumer wealth. "The wealth effect" is the concept that consumers are more likely to spend more money on goods and services when the stock market is appreciating. Conversely, consumers could curtail spending when the stock market is declining. Declines have been sharp these past two years.

The Wilshire 5000 posted healthy gains in both October and November. This index has risen in four of the past twelve months; the monthly declines were larger than the gains.