Saturday, 29 April 2017

Importance of Equities in Global Financial Markets

In 2008, on a global level, the equity market capitalization to GDP ratio was close to 100% (more than twice the long run average of 50%)

During 1900 - 2008, government bonds and bills earned annualized real returns of 1% to 2% on average, which is in line with the inflation rate.   Equity markets earned real returns in excess of 4% per year in most markets.

In most developed countries, equity ownership as a percentage of the population was between 20% and 50%.


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