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The Wilshire 5000 is the probably the ultimate in market-cap weighted indexes. You really can’t get broader than what Wilshire has done. As of May, the total value of the stocks in the index was $14.2 trillion.

Whilshire also tracks its Wilshire 4500 which is all of companies in the Wilshire 5000 that aren’t in the S&P 500. As of May, the total value of Wilshire 4500 was $2.7 trillion. That shows you just how much Wall Street is dominated by the mega-cap stocks. The top 10% holds roughly 80% of the stock market’s value.

Interestingly, the Wilshire 4500 has been creaming the Wilshire 5000 (or really, the S&P 500) for nearly 13 years. The large-caps had a good run from early 1994 to October 1998. Since then, the small guys have dominated.

From October 8, 1998 to yesterday, the total return of the Wilshire 5000 is 99.78%, but the total return of the Wilshire 4500 is 218.29%. That’s a huge spread. In fact, the Wilshire 4500 has a good chance of making a new all-time high today. The previous high was set on April 29.

It’s true that equities have been a tough place to be for the last decade. But the problem has been the large-cap names, not most stocks.

To give you another example, we’re coming up on the 10th anniversary of 9/11. Measuring from September 10th, 2001 - so we’re including a bear market that lasted for another 18 months - to yesterday, the total return of the Wilshire 4500 is 140.85%. Annualized, that comes out to about 9.4%. That fact probably would have surprised a lot of folks in the aftermath of 9/11.

Here’s a chart of the total return of the Wilshire 4500 and the Wilshire 5000 since October 8, 1998:

Click to enlarge

Source: The Wilshire 4500 Rally