Wise Words

DYWANE A. HALL, A BRANCH MANAGER FOR LINSCO PRIVATE LEDGER FINANCIAL SERVICES (800-514-1112) in Falls Church, Virginia, says that while keeping up with the Dow Jones Industrial Average and the Standard & Poor’s 500 is a good way to stay abreast of developments in the stock market, looking at other indices can give you greater insight into what’s happening with different kinds of company shares. Calculated from the performance of 30 leading companies, the Dow is the oldest index, one that focuses primarily on large companies. The S&P 500 casts a broader net to include a wide range of large companies. The S&P Midcap 400 Index hones in on medium-size companies. To get a better sense of what’s happening to smaller companies in technology and other up-and- coming industries, you have a choice: the Russell 2000 Index and the Nasdaq Composite Index are both good measures of smaller companies. Finally, the Wilshire 5000 Index, which blankets 5,000 stocks, gives investors the broadest overview of U.S. stocks by including almost every company traded on the New York, American and Nasdaq exchanges.

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