Equities: The Wilshire 5000 is Down to 3687 Stocks

It's these kinds of factoids that shape a worldview.
From USA Today:

Investors have faced plenty of challenges trying to build a healthy stock portfolio. Now, even as the market hits new highs, there is a new hurdle to throw into the mix: the dramatically shrinking list of companies willing to sell shares to the public.

Companies have been gobbled up in mergers or gone private. Some have thrown up their hands in disgust with Wall Street. Others have been involuntarily delisted because their businesses are suffering. Meanwhile, the engine of new stocks, the initial public offering market, remains moribund.

The stock market is shrinking. The number of companies that individual investors can buy shares in is in a breathtaking decline, continuing a fall that's been years in the making but that's accelerated this year with its record-breaking start to takeovers, mergers and buyouts.

"The stock market is going private," says Robert Maltbie of Singular Research. "It keeps self consuming."...MORE

Throw in the fact that there are fewer and fewer small caps and that portfolio investors can't get exposure to the fastest growing segments of the economy, smaller companies and you end up with the challenge of even matching the growth of the economy as a whole-2%.

There are two alternatives, each of which tend to be destabilizing at both the macro and portfolio level:
1) You can pay higher and higher multiples for the earnings available
2) You can apply leverage.

Nice choices, huh?