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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. The three-year drop in the Wilshire 5000 has pushed down the 10-year average to a mediocre 7 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 were sharp in 2001 and 2002.
The Wilshire 5000 is a composite index of all U.S. stocks; therefore it is no surprise that it rose 6 percent in October along with the other major indexes.
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