Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Sunday, 29 January 2012

Who owns the financial assets in the world?

The West still owns the most of the financial assets of c. $200 trillion in the world: 70% for the US and Europe. China is a runner up with 10% already, not far behind Japan.
In the US and to a much lesser degree equities are much more popular than in the rest of the world.
The bad returns for Japanese equities make equities not popular in Japan but also before 1990 equities were not that popular in Japan.

The preference for equities in rich countries is pretty normal, you start with cash and fixed income and when you have more money you invest in more riskier things like equities. So when the Emerging Markets get richer and their experience with equities is better than in Japan you can expect that they will invest more in equities.

In the West the demographics are working against equities: they are the most popular in the ages 35-65 and then they start to sell (but probably less so than in the past because people work to higher ages nowadays and so start to sell later).

source (via The Big Picture):

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