Broad-Base Index

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Definition: Broad-Base Index


Broad-Base Index


Full Definition of Broad-Base Index


An index whose purpose is to reveal the performance of the entire market, such as the S&P 500, Wilshire 5000, AMEX Major Market Index or Value Line Composite Index. Different broad-base indices have different approaches to ensuring that the index captures the entire breadth of market activity. The Wilshire 5000 takes the most all-inclusive approach by including all the stocks listed on the New York Stock Exchange and almost all the stocks listed on the NASDAQ and American Stock Exchange. The S&P 500 includes 500 companies that are together considered a good indicator for the US stock market, based on the industries the companies operate in, their positions within the industry, and their market capitalizations. The S&P 500 is a market-weighted index, so only 10% if its components make up about 75% of its value. The Value Line Composite Index takes an in between approach by tracking 1700 issues. The Value Line Composite is thought to be a better indicator of speculative stocks than of more stable stocks.


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Definition Sources


Definitions for Broad-Base Index are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.