The Best Performing Stock Markets In The World Since 1900 | An Assessment
Have you ever wondered what are the best performing stock markets in the world? Almost every country has a functional stock market, but not all countries’ stock markets have been performing the same. If your great-great-grandfather had invested $1 in the U.S. stock market in 1900, it would be worth $3,806 at the end of 2019, as the U.S. market has provided an average annual return of 6.5 percent (after adjusting for inflation) since 1900. But are there other stock markets with better returns over that duration? Let’s find out.
Since 1900, some countries’ stock markets have performed well. The top ten best performing stock markets in the world since 1900 include the following countries: Australia, the United States, South Africa, New Zealand, Denmark, Sweden, Canada, Finland, Switzerland, and the Netherlands. We will briefly discuss the top five markets in this post.
What are the five best performing stock markets since 1900?
Over the previous 120 years, business and the economy have seen significant transformations. For example, in the United States, railroads accounted for 63 percent of the total stock market value in 1900, but today, they represent a small portion of the S&P 500 index. Cars, smartphones, airplanes, music streaming, movies, internet gaming, cloud computing, and other technologies have since risen to prominence.
Despite two World Wars, a Cold War, and numerous economic crises, several stock markets have performed remarkably well over those 120 years. According to the annual Credit Suisse Global Investment Returns Yearbook, these are the best performing stock markets since 1900:
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The Australian Stock Market
According to Credit Suisse data, the Australian stock market has offered the most robust returns to investors over the last 120 years, outperforming equities on indexes in the United States and Europe. Since 1900, the ASX (Australian Securities Exchange) has provided actual yearly returns of greater than 6.5 percent when translated into U.S. dollars.
The Australian equity market has been a vital market for Australian businesses to source capital, as well as a good destination for household retirement funds. The total capitalization of listed firms in Australia was slightly less than $2 trillion at the end of 2018, or around 100 percent of GDP.
The Australian Securities Exchange includes most large, well-known companies in Australia, such as major banks and resource companies. They make up a big chunk of Australia’s output and jobs and have kept the Australian economy strong over the years.
According to data provided by Credit Suisse, the London School of Business, and Cambridge University, Australia’s equity market outperformed every other stock market, including the US, South Africa, and New Zealand, if the returns are in US dollars.
The U.S. Stock Market
Since 1900, the stock market in the United States has produced positive returns. The market has delivered 6.5% real annualized returns (af