What do you think contributed to the difference in returns across these two indexes (such as Wilshiree 5,000 and Dow Jones), which are both designed to track the performance of the overall market?
| The following are reasons why there is a difference between the returns of the Wilshire 5000 | |||||||||
| and the returns of the DJIA, even though both indices are designed to track the performance of | |||||||||
| the overall market. | |||||||||
| The Wilshire 5000 is the total stock market index. The index includes almost all | |||||||||
| publicly traded companies that have headquarters in the United States. | |||||||||
| This index is diverse and includes stock from every industry. | |||||||||
| The Dow Jones Industrial Average (DJIA) includes stocks of the 30 largest and most influential | |||||||||
| companies in the United States. | |||||||||
| The DJIA is a price weighted index. | |||||||||
| The DJIA index tracks the changes in investors expectations of the earnings and risks of the large | |||||||||
| companies included in the average. | |||||||||
| The DJIA index represents a quarter of the entire U.S stock market. | |||||||||
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