Financial FitnessGeneral Information

What’s Happened to the Market Capitalization in This Bull Market?

By January 30, 2020 No Comments

I have talked about the market capitalization of stocks in the past, and today I would like to update you on where we are in the markets as it pertains to market cap.

The market capitalization is simply the total value of a publicly traded company.  That valuation is derived by multiplying the total number of shares of stock outstanding by the price of the stock and that’s the overall market capitalization for that company stock.

According to Wilshire, through the end of September 30th, 2019, the total market capitalization of all U.S. stocks was $32.3 trillion.  If we compare that to the start of the bull market on March 10th, 2009, the total market capitalization of U.S. stocks then was only $7.6 trillion.  In other words, the market capitalization has grown over 400%.

Most of the market capitalization is made up of the S&P 500.  The S&P 500 is an index of the 500 largest companies in the United States.  As of September 30th, the S&P 500 was 80% of the total market capitalization for all of the U.S. stocks.  So obviously the majority of the stock market is composed of the 500 largest companies

How does that compare to the bond market?  Next week I will talk about the valuation of outstanding bonds for both government bonds, as well as the municipal bond market.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  All performance referenced is historical and is no guarantee of future results.

Stock investing involves risk, including the loss of principal. 

The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.