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In this day and age we could skip all of that and report on the actual average of all the stocks in the exchange, instead of only a fraction.
by makeitdouble 2y ago
In this day and age we could skip all of that and report on the actual average of all the stocks in the exchange, instead of only a fraction.
- david-gpu 2y agoSP500 represents something like 85% of market capitalization. Adding a few more thousand stocks would make little difference, especially when you consider how heavily correlated they are. Just compare SPY with VT -- nearly the same thing.
- devoutsalsa 2y agoYou just described a total market fund like VTI :)
- e_y_ 2y agoAs I understand it, they don't own every stock. Right now VTI has about 3700 stocks out of the ~4300 on US publicly traded markets (excluding OTC). But it's more representative than the S&P 500 and similar.
- devoutsalsa 2y agoThat's right. Some extremely small companies and stocks don't meet certain liquidity or trading requirements.
- bluGill 2y agoThat may not be what you want. Fortuantly computers can calculate the mix you want. mostly traders care about the stoks they follow they just want someeindication if the unexpected movement they are seeing is the market or something they don't know.