The stock market has now become more than a center of attention for most of the corporates and investors as it functions within a free-market economy, the democratic nature of the stock market has made it accessible for every kind of trader where they can perform their trades as they please.
One does not necessarily need stock market statistics and facts to understand the affect these markets can have on the global economy. However, what’s more troubling is that we are probably not aware of all the effects that a crisis can have on the course of history. It’s important to keep a careful eye on things: preventing a crisis is far better than dealing with its fallout, especially when the next one could prove to be even more catastrophic.
Facts that are Considered to be Basic
Since the stock market is a platform that is used to exchange stocks and bonds (read more – [Bond market article]), knowing the specific details on how it functions and its statistical representations we can derive;
- Stock market falls of 5% to 10% typically necessitate a month of recovery time – Stock market crash statistics derived from historical data reveal that the most regularly encountered market declines are the simplest to recover from, particularly when compared to larger pullbacks. A drop of 10-20% normally takes four months to recover from, whereas a drop of 20-40% takes 15 months. The most substantial market losses we’ve seen were more than 40% drops that lasted an average of 22 months but took approximately 58 months to recover from, making them potentially disastrous.
- About 10% of US households hold international equity – One of the most promising stock-trading statistics is that US stock market patterns over the last decade show that American households are diversifying their portfolios more. Since the Great Recession in 2008, Americans’ proportion of global ownership has steadily increased, with only minor hiccups along the way.
- A $1 trillion worth of stock exchanges are circulated among the biggest 19 stock markets around the world and top five markets are as follows; New York Stock Exchange – $23.02 trillion, Nasdaq Stock Exchange – $19.5 trillion, Shanghai Stock Exchange – $7.05 trillion, Tokyo Stock Exchange – $5.55 trillion, Shenzhen Stock Exchange – $5.16 trillion
In contrast, one can argue that everyone who performs on the stock market doesn’t have an understanding about the prior mentioned facts; which is 100% justifiable, yet not having a glimpse of an idea about such historical data could lead someone to idle in the stock market and eventually fail while trading.
Revealing the Stock Market is a Numbers Game
Being a numbers geek can be beneficial to everyone who has been eyeing the stock market; this point can be proved with a simple example; in 2022, the United States represented 59.9% of global market capitalization. This was a substantial increase from 40.01% in 2018.
The US global market cap has reached this level for the first time since 2005 due to a strengthening dollar and gains in American equities. An ongoing decline in most international equity markets has helped boost the US share of the global market cap.
China is the country that took the biggest hit since the 2016 American presidential election. On election day, the US made up 36.53% of the world market cap compared to China’s 10.21%. A sudden drop pushed China back into its current fourth place on the list, behind Japan and the UK, as the stock market graph below shows. France is fifth with 3.2%, and Switzerland holds sixth place with 2.7%.
Dealing with numbers can be a nightmare for some while it can be a dream job for others, nevertheless if anyone is willing to deal with the stock market having a relative understanding such facts would be the least of their qualification.
