Many countries allow dual citizenship allowing people to take advantage of the best of both worlds. For instance one country may offer excellent job opportunities and earning potential while another country may have better climate or social safety net during retirement. The following infographic shows the countries that allow dual citizenship and other details such as restrictions, if any:
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Source: Insights Artist
The US equity market is one of the best in the world in terms of returns. In the past 151 years, the US stock market has produced an average return of 8.4% per year. The following chart shows the annual real total returns from 1822 to 2022:
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Source: U.S. Stock Market Returns – a history from the 1870s to 2022, The Measure of a Plan
While the above chart is interesting, it is better to look at returns on a decade basis. The chart below shows the returns by decade including the price return, total return and real total return which is adjusted for inflation:
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Source: U.S. Stock Market Returns – a history from the 1870s to 2022, The Measure of a Plan
A few takeaways from the above charts:
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The Complete List of Constituents of the S&P 500 Index can be found here.
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Some countries in the world do not have their own currency. It could be because their economies are too small or some other factors. For instance, a few countries in West and Central Africa use the West African CFA franc and the Central African CFA franc respectively. These countries are former colonies of France and these currencies were created by France to maintain stability and financial control many decades ago.
I came across the following neat infographic that shows the countries that do not have their own currency:
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Source: Insight Artist
Emerging market equities have been some of the worst performers in recent years. From political chaos to corruption and everything in between many of these markets have let down investors. Hence many investors have avoided emerging markets like the plague. According to an article at iShares, over the past 5 years as of September, 2022 emerging markets have earned just 1.1% while US stocks soared during the same time period. No wonder global investors have thrown in the towel on these markets. In an ideal scenario, emerging markets should produce a higher rate of return than the less risky developed equities. However this has not been the case.
Despite the awful returns in the past few years, emerging market stocks are worth holding when considered over the long run. The following chart shows the performance of S&P 500 and emerging markets over two decades:
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Source: How to invest in emerging markets in volatile times, iShares
We may never know how emerging equities will perform this year or the next. To avoid missing out on an spectacular gains it is wise to allocate a small portion of one’s assets to these markets. That way if they underperform again one doesn’t lose much but can reap the benefits if they go the other way.
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Diversification among asset classes is one of the simplest and easiest ways to reduce risk and increase stability to a portfolio. As no one asset class can top the returns every year it is important to diversify. The following chart shows the returns of various asset classes from 2002 to 2021. Large-cap US growth stocks were the winners with an annualized return of around 11%.
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Source: MFS
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