Below are the returns data for various first world stock markets for the last 10 and 39 years. Given our fears about socialism and its impact on our wealth, I think the results are surprising. For the last ten years, Canada, Austria, Norway and Denmark lead the charge while the US ranks 20th, just ahead of Greece. That leading group isn't exactly on the Barry Goldwater favorites list.
The longer 39 year period's top five is also dominated by socialist government structures. I'm not suggesting that socialism is good for economies. Starting a business or finding a job in these countries is likely to be difficult. From the standpoint of investors though, the US' move the left may or may not be bad for returns going forward.
I took this data from an article written by Weston Wellington with the same theme.
| Annualized Return (%) 10 Years as of December 31, 2008 In US Dollars |
Annualized Return (%) 39 Years as of December 31, 2008 In US Dollars |
|||
|---|---|---|---|---|
| Canada | 8.97 | Hong Kong | 14.68 | |
| Australia | 8.36 | Sweden | 12.84 | |
| Norway | 8.25 | Denmark | 12.57 | |
| Denmark | 6.82 | Netherlands | 12.16 | |
| Singapore | 6.48 | Switzerland | 11.47 | |
| Spain | 5.04 | Belgium | 10.72 | |
| Hong Kong | 4.34 | Singapore | 10.65 | |
| New Zealand | 3.62 | Norway | 10.51 | |
| Sweden | 3.29 | France | 10.35 | |
| Austria | 3.21 | Germany | 9.90 | |
| Finland | 2.55 | UK | 9.87 | |
| France | 2.36 | Spain | 9.77 | |
| Switzerland | 2.10 | Japan | 9.75 | |
| Germany | 1.42 | Canada | 9.43 | |
| Japan | 0.58 | USA | 9.12 | |
| Italy | -0.36 | Austria | 8.69 | |
| Netherlands | -0.93 | Australia | 8.45 | |
| Portugal | -1.05 | Italy | 5.99 | |
| UK | -1.05 | |||
| USA | -1.67 | |||
| Greece | -2.13 | |||
| Belgium | -5.69 | |||
| Ireland | -9.47 | |||
1. Jon Meacham and Evan Thomas, "We Are All Socialists Now," Newsweek, February 16, 2009.
2. Jim Davis, Economic Growth and Emerging Market Returns, Purely Academic, August 2006.
What the list fails to factor in is the beta of these returns. How risky was an investment relative to the return it received? I'm not saying the US would be on top, but my money is safer here than in Singapore.
Posted by: the weakonomist | April 29, 2009 at 07:23 PM
How may investors know the beta or relative standard deviations of their investments? My guess is close to zero.
Posted by: Christopher Van Slyke | April 29, 2009 at 08:33 PM