Dissecting the Decline” Financial Planning, October 2002.

Do the indices actually tell us how the overall U.S. equity market is performing?  Is there a better way to take the pulse of the markets?

The article uses a measure called the "share-weighted return," which assigns greater weight to stocks that have more shares outstanding.  It's similar to market cap weighting, but doesn't use the current share prices as part of the weighting formula; only the shares outstanding and their quarterly or annual returns.

The interesting conclusions here are:

  • the 12-month periods ending June 30, 1999 and June 30, 2000 actually had a higher perce...

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