Relative Size of World Stock Markets, end-1899 and end-2011

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Here is an interesting chart showing the share of world stock markets at the end of 19th century and last year:

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The size of the stock markets of France and the UK declined significantly in the period shown due to both the countries losing their status as world superpowers. However the U.S. became a major global player with its stock market rising from under 20% at the end of 1899 to about 45% of the world market size at the end of last year. From the Credit Suisse YearBook:

The New York Stock Exchange traces its origins back to 1792. At that time, the Dutch and UK stock markets were already early 200 and 100 years old, respectively. Thus, in just a little over 200 years, the USA has gone from zero to a 45% share of the world’s equity markets.

Source: Credit Suisse Global Investment Returns Yearbook 2012,  Credit Suisse

Comparison of Real Equity Returns over a Century Between US, UK and Italy

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Equities beat other asset classes such as bonds and short-term deposits over the long-term.Stocks not only yield higher returns than those asset classes but also yield higher returns on an inflation-adjusted basis.

The following graphs for three developed markets over the course of a century proves this point:

Real Equity Returns in US (top), UK (middle) and Italy (bottom), 1900 – 2002

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Source: Triumph of the Optimists,  by Elroy Dimson, Ph.D. Professor, London Business School, October 2003,  ArrowStreet Capital, L.P.

Related ETFs:

SPDR S&P 500 ETF (SPY)

iShares MSCI United Kingdom Index (EWU)

iShares MSCI Italy Index (EWI)

Disclosure: No Positions

Single Country Index Returns: Developed and Emerging Markets 2002 – 2011

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Each year iShares releases the updated Single Country Index Returns chart. The latest version of this chart for Developed Markets from 2002 to 2011 is shown below:

Click to enlarge in pdf format

A few observations:

  • Australia, Norway, Singapore and Canada have the highest 10-year annualized returns of over 11.0%.
  • The 10-year annualized returns for the U.S. is of over 3.0%.
  • Except 2008 and 2011, Canada performed better than the U.S. every year.

 

The chart for Emerging Markets from 2002 to 2011 is shown below:

Click to enlarge in pdf format

A few observations:

  • The frontier market of Peru was one of the best performing markets for most of the years with double digit returns and had the second highest 10-year annualized returns of about 30.0%.
  • While the U.S. had a 10-year annualized returns over 3.0% neighboring Mexico returned about 15.0%.
  • The high risk of investing emerging markets was confirmed during the financial crisis of 2008 when each of the BRIC countries fell over 50% with Russia crashing by about 74%.

Source: iShares

Related article:

Single Country Index Returns: Developed and Emerging Markets 2001 – 2010

Single Country Index Returns: Developed and Emerging Markets 2004 – 2013

Some related ETFs:

iShares MSCI Canada Index (EWC)
iShares MSCI Australia Index (EWA)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Singapore Index Fund (EWS)
SPDR S&P 500 ETF (SPY)

Disclosure: No Positions

Performance Review: Goodyear Tire & Rubber Company vs. Foreign Tire Makers

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The follow charts show the performance of US-based Goodyear Tire & Rubber Company (GT) against select foreign tire makers – Germany’s  Continental AG (CTTAY), Japan’s Bridgestone(BRDCY) and France’s Cie Generale des Etablissements Michelin (MGDDY):

5-Year returns comparison:

Click to enlarge

 

10-Year returns comparison:

 

Source: Google Finance

Disclosure: No Positions