Value Line Composite Index
The Value Line Composite Index is a stock index containing approximately 1,700 companies from the NYSE, American Stock Exchange, Nasdaq, Toronto, and over-the-counter markets. The Value Line Composite Index has two forms: The Value Line Geometric Composite Index (the original equally weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.) The Value Line Composite Index is a stock index containing approximately 1,700 companies from the NYSE, American Stock Exchange, Nasdaq, Toronto, and over-the-counter markets. The Value Line Composite Index has two forms: The Value Line Geometric Composite Index (the original equally weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.) The number of companies in the Value Line Index fluctuates based on factors including the addition or delisting of the companies on the exchanges themselves, mergers, acquisitions, bankruptcies, and the coverage decisions made by Value Line for the Value Line Index. The daily price change of the Value Line Geometric Composite Index is found by multiplying the ratio of each stock's closing price to its previous closing price and raising that result to the reciprocal of the total number of stocks. This index was established on February 1, 1988, using the arithmetic mean to more closely mimic the change in the index if you held a portfolio of stocks in equal amounts. These indexes are typically published in the Value Line Investment Survey, created by Arnold Bernhard, the founder, and CEO of Value Line Inc. The Value Line Composite index contains a mix of roughly 1,700 stocks from the major North American market indexes.
What Is Value Line Composite Index?
The Value Line Composite Index is a stock index containing approximately 1,700 companies from the NYSE, American Stock Exchange, Nasdaq, Toronto, and over-the-counter markets. The Value Line Composite Index has two forms: The Value Line Geometric Composite Index (the original equally weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.) These indexes are typically published in the Value Line Investment Survey, created by Arnold Bernhard, the founder, and CEO of Value Line Inc.
Understanding Value Line Composite Index
The "Value Line" where the index receives its namesake refers to a multiple of cash flow that Bernhard would superimpose over a price chart to normalize the value of different companies. Value Line is one of the most respected investment research firms. Its performance record has been extremely strong. In fact, the firm's model portfolios have generally beat the market over the long run.
The Value Line Composite Index is composed of the same companies as The Value Line Investment Survey, excluding closed-end funds.
The number of companies in the Value Line Index fluctuates based on factors including the addition or delisting of the companies on the exchanges themselves, mergers, acquisitions, bankruptcies, and the coverage decisions made by Value Line for the Value Line Index. Value Line’s decisions as to which companies to include are undertaken with the intention to create a broad representation of the North American equity market. Additionally, the number of companies listed on any given exchange may vary, as a company may move from one exchange to another or be added or delisted. However, delisting or movement of companies on the exchanges are not factors in the Value Line Index methodology, regardless, whether the geometric or arithmetic calculations are employed.
The year that the original Value Line Geometric Composite Index was launched.
The Value Line Geometric Composite Index
This is the original index, introduced on June 30, 1961. It is an equally weighted index using a geometric average. The daily price change of the Value Line Geometric Composite Index is found by multiplying the ratio of each stock's closing price to its previous closing price and raising that result to the reciprocal of the total number of stocks.
The Value Line Arithmetic Composite Index
This index was established on February 1, 1988, using the arithmetic mean to more closely mimic the change in the index if you held a portfolio of stocks in equal amounts. The daily price change of the Value Line Arithmetic Composite Index is calculated by adding the daily percent change of all the stocks and then dividing by the total number of stocks.
Related terms:
American Stock Exchange (AMEX)
The American Stock Exchange (AMEX), now known as the NYSE American, was once the third-largest U.S. stock exchange and dates back to the 18th century. read more
Arithmetic Mean
The arithmetic mean is the sum of all the numbers in the series divided by the count of all numbers in the series. read more
Index Divisor
An index divisor is a number chosen at inception of the index which is applied to the index to create a more manageable index value. read more
Index Fund
An index fund is a pooled investment vehicle that passively seeks to replicate the returns of some market indexes. read more
Long Run
The long run refers to a period of time where all factors of production and costs are variable, and the goal is to produce at the lowest cost. read more
NYSE Amex Composite Index
The NYSE Amex Composite Index is an index of stocks that represent a portion of securities traded on the NYSE Amex exchange. read more
New York Stock Exchange (NYSE)
The New York Stock Exchange, located in New York City, is the world's largest equities-based exchange in terms of total market capitalization. read more
S&P/TSX Composite Index
The S&P/TSX Composite Index is a capitalization-weighted index that tracks the performance of companies listed on the Toronto Stock Exchange (TSX). read more
TSX Venture Exchange
TSX Venture Exchange is a stock exchange in Canada that was originally called the Canadian Venture Exchange (CDNX). read more