Contribution to Global GDP by Select Countries

The contribution to global GDP by select countries is shown in the chart below. The US accounts for the largest portion of the world’s GDP.

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Contribution of Global GDP for select Countries

Source: Out!, Compass 23, 16, Barclays

The UK accounts for less than 5% of the GDP. Since the British economy is so small at a global level all the drama related to Brexit a few months were over-hyped. When markets crashed due to the Brexit fears it was a great time to pick stocks cheap.Though China is a developing country the sixe of the economy is huge compared to that of Britain.

The key takeaway is that the size of the economy at the global level matters. So when panic ensues due to some reason in countries such as the UK or Brazil it is not a good strategy to dump stocks.

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