I have spent countless hours compiling what I believe to be some insightful statistics, and at times humorous facts about the stock market.
This research will give you an eye-opening perspective on the stock market, it’s size, who invests in it, and highlight to the sheer strength of the US stock exchanges and technology companies.
Get ready to have your mind blown.
The total world stock market value is $89.5 trillion in 2021.
The total value of the world’s stock markets at the start of 2021 is $89.5 trillion. The world’s stock markets have grown 358% in 11 years, up from $25 trillion in 2009 1
The US stock markets are 54% of the entire global stock market value.
The US NYSE & NASDAQ stock exchanges combined are 54% of the entire global stock market value, with a market capitalization of $41 Trillion 2
The NYSE + NASDAQ is worth more than the next seven stock exchanges combined.
The USA is by far the most valuable and powerful place to trade stocks. The NYSE & NASDAQ combined are worth more than the next seven stock exchanges combined; Japan, China, Euronext, London, Hong Kong & Canada 3
The NYSE & NASDAQ dominate the world’s stock markets.
The two goliaths in the global stock markets are the New York Stock Exchange and the NASDAQ; they host the majority of the world’s largest companies and the largest technology giants like Microsoft, Apple, Google, Tesla, and Facebook.
Investing in a NASDAQ 100 Index Tracking ETF would have made you 533% profit over the last 20 years.
Many people say the stock market is too risky, and individual stock ownership is even riskier. Owning an index fund on a major world index (especially in the USA) over the long-term is proven to yield a good profit.
- In the last 20 years, from 2000 to year-end 2020, the best performing major stock market index has been the NASDAQ 100 with a meteoric return of 533% 4
- The next best is the Dow Jones Industrial Average with 230%, the S&P500 with 201%, and the German DAX with 168%.
- The UK FTSE has managed a meager 13.48% growth over the last 20 years, and the Nikkei 225 a 96% return.
Apple is the most valuable company in the world by far, worth $2.4 trillion.
US companies still dominate the world’s stock markets. In 2021 Apple Inc. regained the title of the world’s largest company with a total capitalization of $2.4 trillion.
Microsoft is worth more than the entire Brazilian stock market.
In 2021 Microsoft Corp lost its position as the world’s largest company to Apple Inc. but is still valued at $1.7 trillion. Microsoft is now worth more than the entire Brazilian Stock Market, worth $938 Billion, or the Taiwan Stock Exchange valued at $866 Billion. 9
Microsoft & Apple combined are worth more than the entire European Euronext stock market.
As unbelievable as it may seem, Microsoft is valued at $1.7 trillion and Apple $2.4 trillion; their combined value is $4.1 trillion. In June 2020, the Euronext Exchange’s market capitalization was $3.8 trillion.
Facebook, Amazon, Apple, Google & Facebook are worth more combined than any other stock market outside the USA.
The Power of the FAANGs: The combined value of Microsoft Corp., Amazon.com Inc., Apple Inc., Alphabet Inc., Netflix, and Facebook Inc. are worth more than any other stock exchange 9
|Ticker||Company||Market Cap ($M) Jan. 2021|
|6 USA Tech Stocks vs. China & European Stock Markets||Cap ($B)|
|6 Largest Companies in the USA Combined||8,722|
|Shanghai (SSE) China Exchange||4,570|
|Hong Kong (China) Exchange||4,250|
|Euronext (EU) Exchange||3,800|
|London Stock Exchange||4,590|
The 6 most valuable companies in the USA are US technology stocks.
The 6 largest companies in America are American owned technology companies, Apple, Microsoft, Amazon, Google, Tesla, and Facebook, worth a combined $8.7 trillion.
The 6 giant US technology stocks combined are worth more than the GDP of Germany or the UK.
The incredible strength of US technology stocks Apple, Microsoft, Amazon, Google, Tesla, and Facebook, means they have a larger market capitalization ($8.7 trillion) than the GDP of Germany, $3.7 trillion or the UK $2.638 trillion.
Apple is worth more than the entire GDP of Canada.
My American friends will love this fact. Apple is valued at a market capitalization of $2.4 trillion in January 2021, the GDP of Canada for 2020 is $1.6 trillion. In fact, Apple is nearly as big as the GDP of India, which has a GDP of $2.59 trillion.
Information Technology, Financials, Communication, and Healthcare make up over 52% of the world’s companies by value.
Information Technology companies dominate all other industries 16.31% 1 Real Estate accounts for a surprisingly low 3.24% of the global stock market (as weighted by MSCI)
|Global Stock Market Sectors % of the market|
The fastest-growing stock sectors are Energy, Healthcare, and Technology in 2021
2021 is shaping up to be the year of Energy, Healthcare, and Tech Stocks. The Energy sector is usually lagging way behind, but there is now a huge push into clean energy stocks; Solar and Electric Power are fueling the rise, while oil companies are dropping.
The Fastest Growing Industries in the USA 2019
The fastest-growing technology sector industries are Data Storage, and Health Services & Semi-conductors in 2021
Despite a very poor 2016 with a 55% decline, Solar grew by 58% in 2017. With the vast global impetus on green energy, Solar is in 2019 the fastest-growing sector with 73% growth. Semiconductors are in second place with 39.6% growth. The Software Applications and Software Infrastructure industries have seen seven straight years of growth, averaging over 25% per year.
Investing In Stocks Can Be Complicated, Stock Rover Makes It Easy.
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You have a 13% chance of selecting a stock that will beat the S&P500
According to my research using StockRover, out of 7,500 US stocks, only 851 companies with a market capitalization greater than $1 billion beat the S&P 500 index in 2020. The average increase of these stocks was 48%. This means you have a 13% chance of selecting a stock that will beat the market.
The S&P 500 goes up 55% of trading days, and down 45% of trading days.
My research shows that over the last 10 years, the S&P 500 increased 55% of the time, by on average 0.2% per day, and the longest uninterrupted uptrend was 8 days. This means you should invest for the long-term.
The US Stock Markets Have Always Made a Profit Over a 10 Year Period
You should invest in the stock market for a minimum of 10 years, as the US markets have always made a profit over a 10 year period since 1955.
33% of US households have taxable investment accounts
A taxable account is essentially any active (mutual fund) or passive (index tracking fund) that resides outside of an IRA/401K retirement fund. This includes self-directed investors or traders also.
Percent of US Households Investing
In 1998 60% of US Adults were invested in the stock market through mutual funds, retirement plans, or directly. 5 In 2007 the number of invested adults reached a high of 65%.5 The 2000 Dotcom crash & 2008 financial crisis have damaged American adult trust in the markets, and the percentage of adults invested trended downwards to a multi-decade low of 52% in 2016.5
Approximately 33% of US households have taxable investment accounts 7
90% of stock trades are made by robots
The largest uptrend over the last 20 years is the growth of algorithmic trading. It is estimated that 90% of trade volume in the stock market today is robotic quantitative and computer algorithms 6
10% of Americans own 84% of the stock market
It may sound shocking, but is it in line with the Pareto Principle that the wealthiest 10% of Americans own 84% of the stock market. 14
Retail Investor Demographics 7
So what is the breakdown of the typical investor, and are the newest generation of millennials investing.
In the USA, 21% of women, and 24% of men actively invest.
In the US, 21% of women & 24% of men have taxable investment accounts. In fact, 46% of married couples without dependents have taxable investment accounts, 36% of couples with dependents. 27% of single males with or without dependents have investment accounts.
More single females invest in stocks than single females with dependents.
23% of single females without dependents have investment accounts compared to 15% of single females with dependents
Only 22% of millennials actively invest, compared to Boomers with 39%
Only 22% of millennials have taxable investment accounts, compared to Gen Xers at 29%, Boomers at 39% and Silent Generation at 53%. 7
The most significant factors for people actively investing are an income higher than $50K, a college degree, high levels of financial literacy, and higher risk tolerance. 7
Investing knows no color.
Race factors play a negligible role in whether a person decides to actively invest (4% difference) 7
Watch the 39 Stock Market Statistics Video (or continue reading)
The Fastest Growing Stock Markets – NYSE vs. NASDAQ vs. FTSE 100 vs. DAX vs. Nikkei 225
- Of the largest exchanges, the US fairs very well, mainly the NASDAQ exchange, with an excellent 20-year record returning 468%.
Wall Street Services & Fund Managers 11
On average, 60% of highly paid fund managers fail to beat the S&P500 benchmark.
Actively managed fund (Mutual Fund) performance is looked at here. Fund managers seem to be excellent at making profits for themselves but not so good at making profits for their clients. Over any one year, 60.49% of fund managers failed to beat the market index.
In any 3 year period, 92% of fund managers fail to beat the market.
Over three years, 92.91% of fund managers failed to beat the market index.
Over any 15-year period, 82.23% of fund managers fail to beat the market index.
21% of managed stock market funds are closed after 5 years because of poor performance.
21.22% of actively managed funds are closed down after five years, and 42.87% of actively managed funds are closed down within ten years.
The vast majority of mutual funds do not beat the underlying index.
As the vast majority of mutual funds do not beat the underlying index and incur much higher costs than passive index-tracking funds, we can assume that at least 2% less compounding of your wealth will occur.
Over 50 years your share of the market’s cumulative return will reduce from 100% to a horrific 39% when using costly mutual funds 12
Low-cost index fund expenses typically eat up 4% of your dividend yield. 12
Actively managed growth funds typically consume 100% of your dividend yield, with value funds talking 58%. 12
Long-term Stock Market Trends – Shocks, Crisis & Recessions 9
In the past 100 years, we have had an economic recession every 5 years
The fear of the boom and bust is always there for anyone who has money in the market. But overall, for the long-term investor, recessions and crashes can be lived through by staying invested. Let’s take a look at history.
In the past 100 years, we have had 18 economic recessions averaging one every 5.5 years, aligning roughly to the business cycle of 4 years.
In the last 20 years (1998 to 2018), we have had 3 stock market crashes, in 2000, 2008, and 2020 averaging one every 7 years.
The 2000 DOT COM Crash wiped out 40% of the stock market’s value.
The 2000 Dotcom Recession wiped out 40% of the value of the S&P500 in 3 years. While the Financial Crisis 2008-2009 wiped out 38% of market value in a single year.
The 1929 Great Depression wiped out 71% of the stock market’s value.
Comparatively, the great depression wiped out 71% over four years, and the 1974 Shock took out 32% in 2 years.
Stock Market Yearly Returns – The Best and the Worst
It was the best of times; it was the worst of times.
- Investing in a low-cost stock market index tracking fund is simply one of the simplest and lowest risk ways to expose yourself to the dynamic wealth creation of the USA or any other major developed world economy.
- As only 39% of the world’s population is considered Free 10 this limits our choice of safe country indices to invest in. US, UK, Europe, Canada are all still solid bets.
For this analysis of the best and worst years, we will look at the S&P500, the broad US bell weather index that provides a solid basis for analysis.
1933 was the best year in the stock market ever, gaining 46%
The Best Stock Market Years [of the last 90 Years] 10
First, we will look back with fondness at the rip-roaring years of joy. Coming off the back of the great depression, we have 1933 with a joyous 46.59%
Following 1953’s -6.62%, we have 1954 with a 45.02% gain.
Again another great depression rebound rally we have 1935 with 41.37%
After 1957’s loss of 14.31%, we got 1958 with 38.06%. 1927’s pre-depression madness and leverage produced a 37.88% increase.
Finally, the Reagan and Thatcher years yielded Clinton and Blair, which produced 1995’s 34.11% jump. In fact, from 1995 to 1999, we had one of the best Bull Markets ever, yielding an average of 26.3% per year for five years.
In 1931 the US stock market lost 47%; it was the worst year ever recorded.
The Worst Stock Market Years [of the last 90 Years] 10
- Coming in at the number one spot is 1931, with a 47% loss.
- 1937 claims number two with a double-dip 38.59% loss
- The modern-day financial crisis 2008 claims a close number three spot with a 38.59% loss
- At four is 1974 with a 29.72% loss
- Number 5 is 1930 with a -28.48%
- and lastly good old 2002 with a minus 23.37%
A 10% drop in the stock market occurs once every two years on average.
Short Term Stock Market Trend Statistics 16
- Declines of 5% occur 1.5 times per year
- 10% declines in trend occur once every two years.
- The average serious bear market with a decline of over 20%, occur every seven years
Compounded Gains of the S&P 500 – Last 90 Years to January 2019
- A $1,000 investment in 1930 you have yielded you $160,000
- This equates to a 160X return
Automated Robo Advisors are now mainstream, managing over $2 trillion in assets.
Trends in New Services Offered To Investors
Rise of The Robots – Robo Advisors
A Robo Advisor is a digital application that offers users financial advice created by algorithms, artificial intelligence, or mathematical formulas. The term Robo Advisor is short for robot advisor. However, the phrase Robo Advisor is inaccurate. To explain, a Robo Advisor is a digital construct, usually an algorithm or artificial intelligence (AI) rather than an actual robot. By 2017 Robo Advisors were managing $200 billion in assets, Barrons estimates.
Vanguard’s Personal Advisor Services was the largest Robo Advisor in 2019, overseeing $101 billion in assets. Schwab is the second-largest Robo Advisor managing $27 billion assets.
Government agencies like the Nevada State Treasurer are turning to Robo Advisors to manage public investments. The amount of funds controlled by Robo Advisors is growing dramatically. Algonest estimates Robo Advisors worldwide could manage over $2 trillion in assets by 2020.
Robo Advisors do not try to beat the market; they aim to make investing simple.
Most Robo Advisors do not claim to beat the market returns; they aim to simplify investments.
[Related Article: The Best Robo Advisors Review]
Commission Free Trading & Brokerage Services
If you do not get free stock trades in the USA, you need to change broker.
The Stock Brokerage Industry had its first shake-up in the late 1990s with the emergence of the first discount online stock brokerage houses. These new brokerages forced competition in commissions and services, which reduced the commission costs dramatically.
Commissions went from $100 per phone call trade to $9.99 for online trades. These commission costs continued to reduce to 2018, with Interactive Brokers offering $1.- trades.
Robinhood was the first brokerage with a straightforward app that allows you to trade for free.
The first major brokerage to make a move to Commission Free Trading was Firstrade in 2018
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Research & Sources In This Article
- Source – CNBC – https://www.visualcapitalist.com/the-worlds-10-largest-stock-markets/
- Source – https://en.wikipedia.org/wiki/List_of_stock_exchanges
- Source: Liberated Stock Trader
- Stock Market Growth: Source Data TradingView.com
- Stock Market investors Source http://news.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx
- Source: 2012 National Financial Capability Study – State-by-State Survey FINRA Investor Education Foundation
- Market Data Standard & Poors: Analysis Liberated Stock Trader
- Market Data Standard & Poors: Analysis Liberated Stock Trader Data Dec 31, 1928, to Dec 31, 2018
- The Little Book of Common Sense Investing – John C. Bogle
- Other Sources: The Modern Fear and Greed Index
- National Bureau of Economic Research
- MSCI World Index
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