CapitalatWork

• Lectura Académica - Crecimiento vía Inversión Global

When compared to developed stock markets worldwide, the U.S. market has rarely been the top performer in any given year.
This image presents the four best-performing developed stock markets worldwide compared to the U.S. market over the past four years.
With world equity markets up this year, it is no surprise that the U.S. market posted a 5% total return and is not among the top four performers. Out of the 23 countries examined, the U.S. ranked 19th in 2005, 22nd in 2004, 22nd in 2003, and 18th in 2002. In fact, the last time the U.S. was among the four top-performing markets was in 1995. Thus, by taking advantage of opportunities abroad, you may experience higher returns than if you invested solely in the U.S. market.
It is rare to find any single market that has consistently performed among the top global stock markets. Since it is nearly impossible to predict which markets will be a top performer in a given year, it can be beneficial to hold a portfolio diversified across several countries. Moreover, the independent movement of global markets has provided considerable diversification benefits when held in combination with U.S. investments. While all stock markets experience ups and downs, these fluctuations may occur at different times for different markets.
The data assumes reinvestment of dividends and is expressed in U.S. dollars. Returns and principal invested in stocks are not guaranteed. Unlike domestic returns, foreign market returns consist of two main components: market performance and currency fluctuations. Other special risks include foreign taxation, economic and political risks, and differences in accounting and financial standards. Diversification does not eliminate the risk of experiencing investment losses.
Source: Equities by country, Morgan Stanley Capital International Indices - U.S. Stock Market, Standard & Poor’s 500