I posted a funny map on European stereotypes created by Yanko Tsvetkov based on Atlas of Prejudice. The following is a similar hilarious map of the good old USA. Number 6 is very funny. Almost all of the country is meat eaters except for the tiny speck of land of California. The entire population in “flyover country” will go to heaven as per number 8. Who knew! 🙂
Click to enlarge
Source: Atlas of Prejudice by Yanko Tsvetkov
The S&P 500 total returns by sector for the years from 2007 to 2021 is shown in the chart below created by Novel Investor. As with other similar charts, this chart shows the need for diversification among the various sectors. The best sector in one year does not necessarily mean it will be best the following year. For instance, the energy sector was left for dead in 2020 and ended up being the worst performer. But last year it roared back as oil prices soared and economies opened again. It is astonishing that real estate ended up as the second best sector with a return of over 46%. Residential real estate soared to beyond bubble levels as people fled cities and investors and speculators entered the market. In 2020, corona indirectly kept this bubble from forming and the sector was a loser.
Click to enlarge
Source: Novel Investor
Related ETFs:
The Complete List of Constituents of the S&P 500 Index can be found here.
Disclosure: No positions
I came across the below funny infographic on European stereotypes by story teller and magician Yanko Tsvetkov based Atlas of Prejudice. Southern Europe has good cuisine while places like UK is not known for any good cuisine.
Click to enlarge
Source: Atlas of Prejudice by Yanko Tsvetkov
Emerging markets offer some of the top investment opportunities in the world of overseas markets. However they come with more risk than developed market equities. For investors able to withstand the sometimes stomach churning volatility emerging markets can offer excellent returns. The following chart shows the returns of emerging market country returns from 2007 to 2021 based on the MSCI index for each country:
Click to enlarge
Note: Returns shown above are based on the respective MSCI Index Total Annual Returns (includes dividend reinvestment) in US Dollar terms.
Source: Novel Investor
The best performing country last year was the Czech Republic followed by Taiwan and India. Taiwan is the second best market for two years in a row due to its high concentration in the tech sector especially semiconductor and hardware. India and Mexico performed well also.
Turkey had the worst returns because of its currency collapse and other chaos. Chile and Brazil were also in the negative in 2021.
Overall the colorful chart shows that no country retains the top spot every year and hence the importance of diversification cannot be overstated.
For an interactive version of the above chart visit The Novel Investor site.
Related ETFs:
Disclosure: No positions
The universe of foreign stocks available for investment is huge relative to the US market. Thousands of firms trade on a range of markets from other developed countries to emerging and frontier markets. Foreign equity markets are also less concentrated than the US markets and hence offer excellent opportunities for stock pickers. In addition, going overseas offers diversification benefits as well. I have written about concentration in the US markets before many times some of which you can find here and here and here.
Yesterday tech giant Apple(AAPL) crossed the $3.0 Trillion market cap making it the first US company ever to reach that milestone. The past few years and more specifically last year much of the gains in the S&P 500 have been concentrated in the five major firms including Apple. Last year the top five accounted for 31% of the index returns.
I came across a research whitepaper recently that discussed the case for international stocks. The following chart from the paper shows the weightage of the top 5 firms in the US market as represented by the S&P 500 index and foreign markets using the MSCI World ex-USA index from 1990 to 2020:
Click to enlarge
Source: Six Charts That Make the Case for International Equities and Value by Daniel Woodbridge, HartfordFunds
While the top 5 in S&P 500 represents nearly a quarter of the index the top five in the international equities index denote just 7%. This shows how narrow breadth of the US markets.
Related stocks:
Disclosure: No positions