SANTA MONICA, Calif., Nov. 21, 2000 (PRIMEZONE) -- The Wilshire 5000 Total Market Index, the broadest measure of the U.S equities market, has lost nearly one and a quarter trillion dollars in value since the close of business on Election Day, according to Wilshire Associates, a leader in providing investment management, investment consulting and investment technology services.
The loss represents seven and three-quarters per cent of the index's total value at close on Tuesday, November 7. It amounts to one trillion, two hundred forty-eight billion dollars of value. In contrast, dating back to 1976, the Wilshire 5000 has stayed relatively steady following presidential elections.
"We have seen steeper two-week declines in the past twenty-five years," said Tom Stevens, Senior Managing Director of Wilshire Associates, "but this certainly is among the more precipitous." Stevens added that, "the Presidential election impasse is not the only cause but indecision is itself a contributing factor to the decline, at the very least."
The Wilshire 5000 Total Market Index is the only index that provides the magnitude in dollars of what is lost or gained in the U.S. equity markets. Every one-point change in the Wilshire 5000 represents approximately $1.15 billion. It measures the performance of all U.S. headquartered equity securities with readily available price data. More than 7,000 capitalization weighted security returns are used to adjust the index. It is the only such broad-based indicator of the value of U.S. equities.
The Wilshire 5000, which is cited frequently by Federal Reserve Chairman Alan Greenspan as the index he uses to measure the equity market, was developed 25 years ago by Dennis Tito, the founder and chairman of Wilshire and a former scientist with the Jet Propulsion Laboratory.
At close on Election Day the Wilshire 5000 was at 13403. By yesterday's close it had fallen to 12361. At 2p.m. EST it was at 12400.
"Numerous factors have played a part in market direction over the last eight months. Income warnings, oil price increases, tech sector cooling and small indications both of contraction and inflation have contributed to an overall decline of 16 per cent since our 52-week high on March 24," Stevens said.
"The market, which continuously discounts for anticipated events, had come to terms with the presidential contest, as is indicated by the two weeks of trading prior to Election Day. The Wilshire 5000 went to 12394 on November 6 from 12397 on October 23," Stevens noted. "But the impasse, being unprecedented, was unexpected. There is no doubt it has contributed to instability since the polls closed."
"Because the new President will influence regulatory, trade, and fiscal policy, as well as work with Congress, the markets want to know who it will be as much as everyone else. When the winner is known, this uncertainty will be eliminated." Stevens said.
The Wilshire 5000 Total Market Index is available real-time via major market data vendors, including S&P Comstock, Bloomberg, Reuters and Bridge. The index is updated in 15-second intervals. Real-time figures are also available free of charge at the Wilshire web site at www.wilshire.com.
Wilshire Associates is a leader in providing investment management, investment consulting and investment technology services to a wide variety of institutional and high net worth investors worldwide. Wilshire has provided asset management, consulting and portfolio analytics to more than 400 institutional clients with assets of $1 trillion, including 20 of the largest Fortune 500 corporations. It has provided private equity services since 1984 and has advised clients in committing approximately $1.5 billion to private investments in the past ten years.
Past performance is no guarantee of future results. The Wilshire 5000 Total Market Index, Down Jones Industrial Average and S&P 500 Index are unmanaged and are not available for direct investment. For more information about the Wilshire 5000 Index Portfolio, including fees and expenses, please obtain a prospectus by calling 1-800-200-6796. Please read it carefully before you invest or send money. Distributor: First Data Distributors, Inc.