More than 30 years ago, Austin chose the Wilshire 5000 Index as SMI’s primary measure of U.S. stock market performance because it was the broadest measure of the market. Unlike other indexes that measure a specific market segment or use a representative sample of stocks, the Wilshire 5000 captured nearly every publicly traded U.S. stock. Eventually, however, other indexes (such as the S&P 500) eclipsed the Wilshire 5000, pushing it toward irrelevance. Recently, Wilshire sold the rights to this index, and the data is no longer available to us.
Fortunately, in the 1990s Vanguard made the Wilshire 5000 the benchmark for its Total Stock Market Index Fund (VSTSX). Even though Vanguard later shifted to a different, similar index (CRSP US Total Market), VSTSX’s performance record has been virtually identical to the Wilshire 5000 data series. As such, SMI will use VSTSX’s monthly returns as our benchmark for “U.S. Market” performance going forward.
