Investor CAFÉ

The Incredible Shrinking Stock Market

“The number of publicly traded U.S. stocks available to investors is plumbing new lows, even as their prices brave new highs.” — Barron’s (February 24, 2014)

The Wilshire 5000 Stock Index is supposed to be the ultimate measure of the U.S. stock market, but in reality there are now only 3,666 stocks in the index. Back in 1998, it contained 7,562 stocks. The employment participation rate isn’t the only number in decline.

There are a lot of reasons for this decline. The number was artificially high during the dot-com boom of the late 1990s. Since then, the dot-com boom collapsed and mergers/bankruptcies/delistings have exacted a toll. Foreign exchanges have drawn away a few U.S. listings. Companies are buying back their shares in record numbers.

Read more about why the number of public companies is shrinking at Eagle Daily Investor.

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