The Dow Jones 65 Composite Average is an index...you know, a group of securities that rep a market. In particular, it’s a group of 65 large and public companies, representing utilities, transportation, and industry (like manufacturing and construction). 30 of those stocks are the same ones in the Dow Jones Industrial Average, 20 are from the Dow Jones Transportation Average, and 15 from the Dow Jones Utility Average.
Hold up...that’s three markets in one index, though?
Yeah. Actually, the Dow Jones 65 Composite Average is price-weighted for each of those three markets, which means that each of the 65 companies’ securities in the index are weighted by the price per share. The bigger the price of your share, the more weight you’ll have in the index.
Other big indices, like the superstar Dow Jones Industrial Average, is weighted via market capitalization, which multiplies the number of shares by the price of the share. The number of shares don’t affect the Dow Jones 65 Composite Average...nope, nada. Because not all indexes (yeah, you can use “indexes” or “indices”) are calculated the same, you gotta make sure you know what’s going on with them behind the scenes to really know what you’re looking at.
The Dow Jones 65 Composite Average used to be a good measure of the economy when utilities, transportation, and industrial doings made up most of the economy. But these days, technology, healthcare, and finance are dominating the scene. So this index is, well, going out of style. It happens to the best of us.
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Finance: What is the Wilshire 5000?9 Views
finance a la shmoop what is the Wilshire 5000 well it's an index as in index fund
ticker W 5000 well the Wilshire 5000 had the top 5,000 most highly valued US [List of all the stocks in the Wilshire 5000]
stocks in it when it launched you know by the late 90s the index had added
another about 25 hundred names but it didn't change its name to Wilshire 7500 [Wilshire 7500 is crossed out and changed back to 5000]
and it changed names as companies split and spun off and as the internet IPO [Companies dividing into two]
boom forced a whole load of adds to the index there well then guess what a whole [Stocks flooding into the Wilshire 5000]
bunch of bankruptcies in the dot-com era came along you know along with mergers
and other financial dietary restrictions and they caused the size of the index to
fall to the you know 3,700 names zone where it sits today the Wilshire 5000 [Number of names in the index shrinking]
and yeah we don't know why then I'll just rename it the Wilshire 3,700 ish [Guy changing the sign as 3700ish appears and replaces the 5000]
either well its distinguished from say the S&P 500 in that it covers a much [The S&P 500 is moved away]
broader range of securities from mega cap companies like Apple all the way
down to companies with just a few hundred million bucks in market cap so [Examples of the smaller cap companies are highlighted]
when investors want to think about all stocks or at least the broadest swath of
them they think Wilshire and then a number but they think Wilshire anyway
and well we could give you roughly thirty seven hundred reasons why [Lady Gaga on stage]
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