Mix of Global Investible Assets

Source: https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/

As investors pour through their daily ration of financial publications, it would be easy to assume that the most important global asset class is stocks, when in fact publicly traded equities represent only 14% of global investible assets. Bonds and real estate are short-changed in terms of media coverage while crypto assets, gold and other collectibles are given way too much emphasis in terms of their aggregate value.

Part of the reason for this is the ease with which investors can evaluate one’s stock and crypto positions on a real-time basis.  The value of less liquid assets like real estate is more complicated and changes at a much slower pace.  In any event, it is unlikely that most people view their residence as a tradable asset.

The total asset in this study is approximately US$650 trillion, of which only some $90 trillion are in stock positions. Thus, a crash in the stock market only impacts 15% of global wealth.  The impact of the bond market on global wealth is often ignored but makes up 40% of the investible assets or $260 trillion.

As financial data has become easier to access, individual investors have become increasingly engaged in the daily movement of stock markets.  However, it is important to keep the role of stocks in the construct of global wealth in context.  It may be the most exciting, but it is not necessarily the most important.  It is also worth noting that the more dominant asset classes of bonds and real estate also tend to be more stable.


Disclaimer:  Please note that the publication is designed to provide general information only. It reflects the thoughts and opinions of Logan Wealth Management and should not be construed as financial advice, nor should the information be considered a substitute for personal advice. Information used in this publication has been gathered from sources believed to be reliable. Logan Wealth Management is not responsible for and assumes no liabilities or responsibility for any loss or damages suffered as a result of the use or misuse of, or reliance on the information or content of this publication. Please consult your financial adviser to determine whether the information is applicable to your personal situation.