Stock Market & Financial Industry Statistics & Trends
39 Amazing [Fully Researched & True] Stock Market Statistics & Trends. Size, Growth, Investor Demographics, Best & Worst Years.[Includes Infographic+Video]
This research is designed to give you an eye-opening perspective on the stock market, it’s size, who invests in it and the different markets and vehicles that exist inside it.
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Stock Market Size
- The entire worlds stock exchanges have a capitalization of $80 trillion USD (trending up from $25 trillion in 2009 a 320% increase) 1
- The U.S. stock exchanges (NYSE & NASDAQ) combined make up 39% of the entire global stock market value – with a market capitalization of $31 Trillion USD 2
- The NYSE & NASDAQ combined are bigger than the next 7 exchanges combined (Japan, China, Euronext, London, Hong Kong & Canada) 3
We now know that the 2 goliaths in the global stock markets are the New York Stock Exchange and the NASDAQ.
Stock Market Growth Trends 4
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 U.S.A.) over the long-term is proven to yield a good profit.
- In the last 20 Years from 1998 to 2018 – The Best Performing Major Index has Been the NASDAQ 100 with a meteoric return of 468%
- The next best is the Dow Jones Industrial Average with 191%, the German DAX with 163% and the S&P500 with 158%
- The UK FTSE has managed a dreary 25% and the Nikkei 225 a 29% return.
Stock Market Private Retail Investors
- In 1998 60% of U.S. 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 & 2007 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 20165
- Approximately 33% of U.S. households have taxable investment accounts 7
- 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
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 U.S. Households Investing
Retail Investor Demographics 7
So what is the breakdown of the typical investor and are the newest generation of millennials investing.
- In the U.S. 21% of women & 24% of men have taxable investment accounts.
- 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
- 23% of single females without dependents have investment accounts compared to 15% of single females with dependents
- Only 22% of millennials have taxable investment accounts, compared to Gen Xers at 29%, Boomers at 39% and Silent Generation at 53%
- The biggest factors as to people actively investing are an income higher than $50K, a college degree, high levels of financial literacy and higher risk tolerance.
- Race factors play a negligible role in whether a person decides to actively invest (4% difference)
Watch the 39 Stock Market Statistics Video (or continue reading)
The Best Stock Markets – NYSE vs NASDAQ vs FTSE 100 vs DAX vs Nikkei 225
Of the largest exchanges, the U.S. fairs very well, especially the NASDAQ exchange, with an excellent 20-year record returning 468%.
Wall Street Services & Fund Managers 11
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 1 year 60.49% of fund managers failed to beat the market index.
- Over 3 years 92.91% of fund managers failed to beat the market index.
- Over 15 years 82.23% of fund managers failed to beat the market index.
- 21.22% of actively managed funds are closed down after 5 years
- 42.87% of actively managed funds are closed down with 10 years
As the vast majority of mutual funds do not beat the underlying index and they 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
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 1 every 5.5 years, aligning roughly to the business cycle of 4 years.
- In the last 20 years (1998 to 2018) we have had only 2 (2000 to 2002 & 2007 to 2009) recessions averaging 1 every 10 years.
- However, 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.
- Comparatively the great depression wiped out 71% over 4 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 U.S.A. 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. U.S., 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 large U.S. bell weather index that provides a solid basis for analysis.
The Worst Stock Market Years [of the last 90 Years] 10
Let’s look at the miserable years first.
- 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 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%
The Best Stock Market Years [of the last 90 Years] 10
Next, we 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 26.3% per year for 5 years.
Compounded Return of the S&P500 10
This chart highlights that a single $1000 investment in 1930 in the S&P500 index would have yielded nearly $160,000 dollars, essentially a return of 160 times the original investment, despite 18 Recessions and crashes.
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- Source – Bloomberg – http://www.businessinsider.de/global-market-cap-is-about-to-hit-100-trillion-2017-12?r=UK&IR=T
- Source Wikipedia – 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