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NASDAQ and Total Stock Market Index?
Old 01-06-2012, 11:10 AM   #1
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NASDAQ and Total Stock Market Index?

Hi --

I've posed the following question to two Vanguard "specialists" at the Voyager services 800 number:

"Does "Total Stock Market" include funds traded on the NASDAQ exchange, or just the NYSE?"

Answer #1: " The Total Stock Market Index includes all stocks legally traded in the United States and approved by the SEC."

Answer #2: "No, NASDAQ stocks are not included. Only NYSE stocks are included."


Huh? These two guys are experts? Or at least "trained?"

So, what's the answer? Should one hold some QQQ or does TSM really index all US stocks, no matter where they are traded?

Sorry if this is a really dumb question...

Thanks!
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Old 01-06-2012, 11:42 AM   #2
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If you research the holdings, the #2 and #4 stocks held (AAPL and MSFT) are on the NASDAQ, so there's your answer. https://personal.vanguard.com/us/fun...T#hist=tab%3A2

The fund holds 3344 stocks. NYSE alone claims to have over 8000 issues and it looks like the NASDAQ has close to 3000 so it doesn't appear they hold a part of every US stock.

https://personal.vanguard.com/us/Fun...FundIntExt=INT tells its strategy and policy and confirms it holds stocks in the NYSE, AMEX, and NASDAQ.

So neither answer is correct. They don't own all of the penny stocks, but the first one was certainly closer to correct.
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Old 01-06-2012, 11:48 AM   #3
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You need to distinguish between the EXCHANGES a stock is LISTED on, and the EXCHANGES a stock is TRADED on.

AAPL and MSFT are 4 letter symbols, that immediately tells me they are not members of the NYSE (NYSE listed stocks only have 3 or fewer letters).

However, the stocks are still traded on an exchange (which includes NYSE, Chicago and many other regional exchanges).
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Old 01-06-2012, 03:32 PM   #4
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Thanks. Still trying to figure this stuff out...
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Old 01-07-2012, 08:30 AM   #5
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Quote:
Originally Posted by BarbWire View Post
Thanks. Still trying to figure this stuff out...
BTW, the TSMI is suppose to follow the Wilshire 5000, which no longer has 5000 stocks in its index. I'm sure you can search for the list of stocks in that index if you really wanted too.
Understand the "experts" you talk to on the phone have 3 weeks of training, so take their answers with a grain of salt. Its best to have some knowledge before you talk to them. BTW, this applies to all everybody, it's not just a Vanguard problem. I've had the same problem with Fido advisor, and had to correct them (I think they are afraid of saying "I don't know, but can I get back to you", and feel they must pretend to be all knowing and will just make up an answer.
TJ
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Old 01-07-2012, 10:23 PM   #6
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I agree arming yourself with questions helps

Think about questions like this-

Over the counter (OTC) vs NASDAQ- what are the differences?
What are the requirements to be listed on the NYSE? (There are minimum rules...)
What is the S&P500?
What is the Wilshire 5000?
What is the Wilshire 4500?
How much of the S&P 500 market cap is the Wilshire 5000 market cap (that can probably be worded better, but this helps to see if person knows the market and how much influence the big stocks have).

Even if you know the answer, when you call, ask questions which you KNOW the answer to to give you confidence the person on the phone has good information for the questions you NEED the answer to.
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