You might wonder where in the world the biggest investment opportunities are.
Ordinary people might look at an atlas… but your decisions will be distorted if you base them on measures such as land mass, population or gross domestic product.
Canny investors look at a World Equity Market Capitalization map instead. According to data from Bloomberg as shown in this cartogram by Dimensional, here’s how the world’s capital was invested at the end of 2017.
As you can see, the USA is the biggest market by far. If you prefer lists to visuals, here’s the top 10 at a glance:
- South Korea
But there is somewhere else you can invest that’s not shown on any standard geographic map.
So where is it?
The moon? Mars? Venus?
Did you know that some companies are bigger than some countries?
Valued at £638bn at the end of 2017, Apple is so big it just misses the top 10 list (it’s shown in the corner of the US visual above, so you can judge its scale).
According to Wikipedia for the second quarter of 2018, Apple is still the biggest company by market cap, followed by Amazon and then Alphabet, Microsoft and Facebook (all US companies). Source
What this means to you
On one level, we’re sharing this information because it makes an interesting topic of conversation at certain dinner parties (in fact, some clients have asked me to send them the Apple graphic above for exactly that purpose).
On another level, clients often ask us about the impact of Brexit, but it’s important to realise that Europe is not that big in market terms.
Most importantly, as we often say, it’s wise to have a globally diversified portfolio. Global equities provide exposure to:
- Over 40 developed and emerging countries
- Over 10,000 thousand stocks
- Many sectors and currencies
P.S. Note that even diversification doesn’t eliminate risk entirely.