Most investors assume the US economic juggernaut is the world’s largest, and they’d be right. But if you were to guess just how much of the total the US represents, likely you’d be wrong.
At around 25% of the total, or approximately $30 trillion, the US is the world’s dominant economy. However, many investors assume the share of the pie is much bigger.
Likewise, if you ask investors what share of GDP do the emerging markets represent, 90% underestimate that emerging markets are a MAJORITY of global GDP. Turns out India and China are pretty big economies too, and emerging markets hold about 80% of world population.
Likely, this disconnect has to due with stock market returns the past 15 years. While the US has ascended to represent approximately two thirds of global stock market capitalization, emerging markets have declined to around 10% (free float adjusted) or closer to 25% (not adjusted).
