A long term perspective

Interesting chart from UBS (shared by Ben Carlson, Ritholtz Wealth Management). At the start of the 20th century, the US stock market represented 14.5% of global equity markets. Today, it represents 60.5%. The UK was the largest market in 1899 at roughly a quarter of the global total; it has now shrunk to 3.7%. Belgium accounted for 3.4% back then — larger than Germany’s share today. A lot can change in 125 years. The main message for investors is simple: assuming US exceptionalism will last forever, and that market weights will not evolve over time, is in our view a significant mistake. The US represents after all “only” around 4% of the world’s population and about 25% of global nominal GDP.