World Stock Market Cap Breakdown by Country: 1900 vs. 2013

My Money Blog has partnered with CardRatings for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

When learning about investing, it is good to remember that nearly all the “commonly accepted advice” out there is based on at most 100 years of historical returns. Meanwhile, many of us still have 50 or more years ahead of us. Is that enough data? I’m pretty comfortable with broad patterns such as stocks outperforming bonds over long periods across nearly every developed country. However, as the conclusions get finer I get more and more skeptical.

For example, I wouldn’t bet all my chips on any one country. The world will look very different in 50 years, and I doubt we’ll be able to predict much of it. (Though I’m sure it will seem “obvious” in retrospect.) Take a look at these two charts comparing the relative market capitalizations of world equity markets as of the end of 1899 and 2013.

worldcap1900

I’ll check back in around 2050…

Source: Credit Suisse Global Investment Returns Yearbook (via Abnormal Returns)

My Money Blog has partnered with CardRatings for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.



User Generated Content Disclosure: Comments and/or responses are not provided or commissioned by any advertiser. Comments and/or responses have not been reviewed, approved or otherwise endorsed by any advertiser. It is not any advertiser's responsibility to ensure all posts and/or questions are answered.

Comments

  1. Changes do occur everyday in different ways. Interesting graphs by the way.

  2. Change is constant is a true statement here. Very interesting and important perspective. Thanks for sharing.

  3. 20th century was an anamoly because of two world Wars and then the cold war. 5% of world’s population can’t control nearly half of world’s stock market indefinitely I predict a more population proportional distribution by 2099

Speak Your Mind

*