There are a variety of market indexes that function as statistical gauges of the market's performance. Many investors look at the Dow Jones Industrial Average (DJIA) or the 澳洲幸运5官方开奖结果体彩网:Nasdaq 100 Index as benchmarks or representatives of the stock market as a whole. On the downside, these indices are composed of only 30 and 100 stocks, respectively.

Perhaps the most famous and most commonly used market index to measure the market's performance as well as acting as an indicator of the health of the economy is the S&P 500. The 澳洲幸运5官方开奖结果体彩网:Standard and Poor's 500 Index consists of the 500 largest companies in the U.S. by weighted market cap.

Read on to discover additional market indexes that shed light on the overall stoc💞k market.

Market Indexes

Wilshire 5000

The index with one of the broadest representations of the total market is the 澳洲幸运5官方开奖结果体彩网:FT Wilshire 5000 𝔍Total Index Series.

Contrary to what its name implies, the Wilshire 5000 can include a lot more (or less) than 5,000 equities. As of March 31, 2023 (latest information), the index included 3,480 stocks. The purpose of the index is "to reflect the performance of all publicly traded U.S. equity securities that have readily available prices."

Russell Indexes

For investors interested in how small-caps are doing, one of the most widely followed indexes is the Russell 2000. The Russell 2000 index tracks 2,000 small-cap firms in the U.S. Small-cap firms are generally more risky as their survival rates are lower.

Now, the Russell 2000 selects the smallest stocks from the 澳洲幸运5官方开奖结果体彩网:Russell 3000 universe. The Russell 3000 includes nearly 98% of the entire U.S. stock market, focusing on all large-cap, mid-cap, and small-cap stocks. It has a very broad exposure. Both the Russell 3000 and the Wilshire 5000 are similar in that respect, hence their similar performance as shown in the performance table below.

The diagram below illustrates bot🌱h the number of securities and the degree of representation ofꦯ each index.

Market Index Returns

Finally, let's take a look at just how these market indexes have performed over the last five and 10-year periods. The widely used DJIA and Nasdaq 100 are broad-market indexes but they track very different companies. To start, the DJIA tracks such companies as Caterpillar, Cisco, and Coca-Cola; mega-cap companies that in many cases pay steady dividends but do not witness as much growth.

Meanwhile, the Nasdaq 100 is largely technology-based, with such holdings as Netflix and NVIDIA. The tech industry has seen significant growth in the last decade. Thus, it's no surprise that over the longer term (10 years in this case), the Nasdaq 100 outperformed all of the other indexes. The worst performer was the Russell 2000, which as noted before, focuses on small-cap companies.

The S&P 500 wasn't able to beat out the Russell 3000 or the Wilshire 5000, both of which include a much broader array of stocks than the S&P 500. Below are the five- and 10-year performance of each index as of the dates noted.

The Bottom Line

Stock market indexes seek to track certain areas of the stock markꦇet. Some look to include as much of the investable U.S. equities market as possible, such as the Wilshire 5000 and the Russell 3000. Others take a much more narrow view, such as the 30 highest-🌸quality stocks in the DJIA.

There are indexes that arꦑe so niche they focus on very specific sectors, such as mining companies or semiconductor companies. Investors have a plethora of options when it comes to investing in funds that track indexes, allowing investors to seek exposure to the entire stock market as well as specific areas of it.