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Visualizing the Wealth of Nations

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The Wealth of Nations (2018-2028F)

Visualizing the Wealth of Nations

Just as there exists a longstanding inequality in the distribution of household wealth, so exists a considerable differential in the amount of wealth held by countries on the international stage.

Simply put, some nations are “haves”, while many others are “have-nots”.

“Wherever there is great property, there is great inequality.”

– Adam Smith, The Wealth of Nations

Ranking Riches

We previously showed you how the ranking of the richest countries in the world has changed over the course of the last 10 years (2008-2018).

Today’s chart keys on a slightly different question.

What are the wealthiest nations today, both in absolute and per capita terms, and how is this list projected to change over the next decade? Let’s see how the wealth of nations stack up.

Private Wealth: Now and in the Future

Using data from the Global Wealth Migration Review, here are the 10 wealthiest nations both now and as forecasted in 2028.

RankCountryWealth (2018)Wealth (2028F)Approx. Growth
#1🇺🇸 United States$60.7 trillion$72.8 trillion20%
#2🇨🇳 China$23.6 trillion$51.8 trillion120%
#3🇯🇵 Japan$19.1 trillion$24.9 trillion30%
#4🇮🇳 India$8.1 trillion$22.8 trillion180%
#5🇦🇺 Australia$6.0 trillion$10.8 trillion80%
#6🇬🇧 United Kingdom$9.1 trillion$10.0 trillion10%
#7🇩🇪 Germany$8.8 trillion$9.7 trillion10%
#8🇨🇦 Canada$6.0 trillion$7.8 trillion30%
#9🇫🇷 France$5.9 trillion$6.4 trillion10%
#10🇮🇹 Italy$3.8 trillion$4.2 trillion10%

It’s worth noting that these figures are meant to represent wealth, which is defined as the total amount of private wealth held by individuals in each country. It includes assets like property, cash, equities, and business interests, minus any liabilities.

China has been the best performing wealth market in the last decade, and these projections show the country as continuing on that track. In fact, both China and India are expected to see triple-digit growth in private wealth between now and 2028.

As far as developed countries go, it’s not surprising that growth rates are much more modest. In Europe, countries like Great Britain, Germany, France, and Italy are only expected to add 10% to private wealth in 10 years, while Canada (30%) and the U.S. (20%) do marginally better.

One notable exception here is Australia, which is expected to add 80% to private wealth over the timeframe – and it will leapfrog both Germany and the U.K. in the rankings in the process.

Wealth per Capita

Here’s a look at the wealth of nations in a different way, this time with numbers adjusted on a per capita basis.

RankCountryEst. PopulationWealth per capita (2018)
#1🇲🇨 Monaco38,695$2,114,000
#2🇱🇮 Liechtenstein37,810$786,000
#3🇨🇭 Switzerland8,420,000$315,000
#4🇱🇺 Luxembourg590,667$300,000
#5🇦🇺 Australia24,600,000$244,000
#6🇳🇴 Norway5,258,000$198,000
#7🇺🇸 United States327,200,000$186,000
#8🇸🇬 Singapore5,612,000$177,000
#9🇭🇰 Hong Kong7,392,000$169,000
#10🇨🇦 Canada36,540,000$163,000

When using per capita numbers, it’s absolutely no contest.

Monaco, the city-state on the French Riviera, is a money magnet with $2.1 million of private wealth per citizen. This means the average Monacan is at least 10 times richer than the average North American or European.

Liechtenstein, a microstate that sits in the Alps between Switzerland and Austria, also has a high average wealth of $786,000 per person. Like Monaco, its population is well under 50,000 people.

Finally, it’s worth mentioning that three countries on the per capita list also made the overall list. Put another way, the countries of Australia, Canada, and the United States can all claim to be among the wealthiest of nations in both absolute and per capita terms.

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Technology

Bitcoin is Near All-Time Highs and the Mainstream Doesn’t Care…Yet

As bitcoin charges towards all-time highs, search interest is relatively low. How much attention has bitcoin’s recent rally gotten?

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Bitcoin Near All-Time Highs vs. Search Interest

Just about every financial asset saw a huge drop in March, but few have had the spectacular recovery that bitcoin has had since then.

Up more than 300% from the March lows, bitcoin is within $1,000 of its all-time high ($19,891) established three years ago. While 2017’s run-up saw a huge surge in Google searches, interest this time around is less than a quarter of what it was back then.

This graphic overlays bitcoin’s price changes against Google search interest for “bitcoin” between 2017-Nov 2020, showing the muted relative search interest for its recent rally. Despite Google search interest being low, it is turning upwards, potentially hinting at a rise to cap off 2020.

Nobody’s Searching? Maybe Bitcoin is Already Mainstream

Bitcoin’s mainstream attention in 2017 was exceptional, and was likely the first time many people had even heard about the digital asset.

After doing all of their Google research back then, it’s possible that the general population is now well aware of the cryptocurrency and doesn’t need to search up the basics again. Add to this that bitcoin is now easily purchasable through popular services like Robinhood and Paypal, and you have fewer people who need Google to figure out the intricacies of bitcoin wallets and transactions.

While people might not be searching for information on bitcoin, the media has certainly picked up on its movement over the past year. Mainstream coverage regarding the cryptocurrency is currently at a relative all-time high for the past 12 months.

Mainstream Media Mentions of Bitcoin

Even if current mainstream coverage isn’t far from previous peaks, it’s still likely that people are seeing an increase in bitcoin content in their news feeds following the recent surge.

This rally is also attracting increased talk on social media sites like Twitter. That said, while there has been a rise in the volume of bitcoin-related tweets in November 2020, numbers are still quite low compared to the amount of tweets in 2017.

Tweets mentioning Bitcoin

Daily tweet volume reached above 60,000 recently, but is still far from the +100,000 daily tweets that were being sent at the top of 2017’s bull run.

Where in the World is Google Search Interest for Bitcoin?

Even if worldwide search interest isn’t as high as it was in 2017, there is one country where bitcoin is being googled more now: Nigeria.

Since 2015, the Nigerian Naira has lost more than 50% of its value against the U.S. dollar. This, coupled with the country’s high share of unbanked citizens means that alternative currencies and payment methods have steadily risen in popularity and utility.

Nigeria Bitcoin Google Search Trends

FinTech startups like Chipper Cash are providing Nigeria and other African nations with no-fee P2P payment services, along with the ability to trade bitcoin. The service is also beta testing the buying and selling of fractional shares of popular U.S. stocks.

Started up in 2018, Chipper Cash’s monthly payment values are now over $100 million, and the company has attracted investment from top VC funds like Bezos Expeditions as they provide a valuable service in an emerging market.

If Bitcoin is Mainstream, Where Does It Go From Here?

While bitcoin is proving itself to be a useful medium of exchange around the world, it’s still primarily a speculative asset. As 2020 saw massive increases in money supply across the board, bitcoin reacted best compared to other speculative assets, with its ascent to $19,000 almost completely uninterrupted since the $10,000 price area.

Time will tell if 2017 is set to repeat itself, or if bitcoin is getting ready to set new all-time highs going into 2021.

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Investor Education

Ranking Asset Classes by Historical Returns (1985-2020)

What are the best-performing investments in 2020, and how do previous years compare? This graphic shows historical returns by asset class.

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Historical Returns by Asset Class

Historical Returns by Asset Class (1985-2020)

Mirror, mirror, on the wall, is there one asset class to rule them all?

From stocks to bonds to alternatives, investors can choose from a wide variety of investment types. The choices can be overwhelming—leaving people to wonder if there’s one investment that consistently outperforms, or if there’s a predictable pattern of performance.

This graphic, which is inspired by and uses data from The Measure of a Plan, shows historical returns by asset class for the last 36 years.

Asset Class Returns by Year

This analysis includes assets of various types, geographies, and risk levels. It uses real total returns, meaning that they account for inflation and the reinvestment of dividends.

Here’s how the data breaks down, this time organized by asset class rather than year:

 U.S. Large Cap StocksU.S. Small Cap StocksInt'l Dev StocksEmerging StocksAll U.S. BondsHigh-Yield U.S. BondsInt'l BondsCash (T-Bill)REITGold
TickerVFIAXVSMAXVTMGXVEMAXVBTLXVWEAXVTABXVUSXXVGSLXIAU
2020*1.5%-5.5%-10.3%-0.7%4.9%-0.5%2.6%-0.7%-16.4%21.9%
201928.5%24.5%19.3%17.6%6.3%13.3%5.5%-0.1%26.1%15.9%
2018-6.2%-11.0%-16.1%-16.2%-1.9%-4.7%1.0%-0.1%-7.7%-3.2%
201719.3%13.8%23.8%28.7%1.4%4.9%0.3%-1.3%2.8%9.3%
20169.7%15.9%0.4%9.5%0.5%9.0%2.5%-1.8%6.3%6.6%
20150.6%-4.3%-0.9%-16.0%-0.3%-2.0%0.3%-0.7%1.6%-12.3%
201412.8%6.7%-6.4%-0.2%5.1%3.9%8.0%-0.7%29.3%-1.2%
201330.4%35.8%20.3%-6.4%-3.6%3.1%-0.4%-1.5%0.9%-29.0%
201214.0%16.2%16.5%16.8%2.4%12.5%4.5%-1.7%15.7%6.5%
2011-0.9%-5.5%-15.0%-21.0%4.6%4.2%0.8%-2.9%5.5%5.5%
201013.4%26.0%6.8%17.2%5.0%10.9%1.7%-1.5%26.6%26.0%
200923.3%32.7%24.9%71.5%3.2%35.6%1.6%-2.4%26.3%20.2%
2008-37.0%-36.1%-41.3%-52.8%5.1%-21.3%5.5%2.0%-37.0%5.4%
20071.3%-2.7%6.8%33.6%2.8%-1.8%0.1%0.7%-19.7%25.8%
200612.9%12.9%23.1%26.3%1.8%5.7%0.5%2.1%31.8%19.3%
20051.4%3.9%9.8%27.7%-0.9%-0.5%1.8%-0.5%8.3%13.0%
20047.3%16.2%16.5%22.1%1.0%5.2%1.8%-2.0%26.7%1.4%
200326.2%43.1%36.1%54.7%2.1%15.1%0.4%-0.9%33.3%19.2%
2002-23.9%-21.8%-17.6%-9.6%5.8%-0.6%4.2%-0.7%1.3%20.8%
2001-13.3%1.6%-23.1%-4.4%6.8%1.3%4.6%2.6%10.7%-0.4%
2000-12.0%-5.8%-17.1%-29.9%7.7%-4.1%5.4%2.5%22.2%-9.6%
199917.9%19.9%23.6%57.3%-3.4%-0.2%-0.6%2.0%-6.5%-1.7%
199826.6%-4.2%18.0%-19.4%6.9%3.9%10.2%3.5%-17.7%-2.4%
199731.0%22.5%0.0%-18.2%7.6%10.0%8.9%3.5%16.8%-23.2%
199618.9%14.3%2.6%12.1%0.3%6.0%8.3%1.9%31.4%-7.7%
199534.0%25.6%8.4%-1.9%15.3%16.2%14.3%3.1%10.0%-1.7%
1994-1.5%-3.1%4.9%-10.1%-5.2%-4.3%-7.3%1.3%0.4%-4.9%
19937.0%15.5%28.9%69.4%6.7%15.1%10.7%0.2%16.3%13.9%
19924.4%14.9%-14.7%7.8%4.1%11.0%3.3%0.6%11.2%-8.7%
199126.3%40.9%8.7%54.5%11.8%25.2%7.5%2.5%31.5%-12.5%
1990-8.9%-22.8%-27.9%-16.1%2.4%-11.3%-2.7%1.6%-20.3%-8.3%
198925.5%11.0%5.6%56.9%8.6%-2.6%-0.6%3.7%3.9%-6.8%
198811.3%19.7%22.8%33.9%2.8%8.8%4.4%2.1%8.6%-19.6%
19870.3%-12.7%19.3%9.3%-2.8%-1.7%4.5%1.3%-7.8%19.0%
198616.8%4.5%67.5%10.4%13.9%15.6%10.1%5.0%17.7%17.9%
198526.4%26.2%50.3%22.9%17.6%17.5%7.0%3.8%14.6%1.7%

*Data for 2020 is as of October 31

The top-performing asset class so far in 2020 is gold, with a return more than four times that of second-place U.S. bonds. On the other hand, real estate investment trusts (REITs) have been the worst-performing investments. Needless to say, economic shutdowns due to COVID-19 have had a devastating effect on commercial real estate.

Over time, the order is fairly random with asset classes moving up and down the ranks. For example, emerging market stocks plummeted to last place amid the global financial crisis in 2008, only to rise to the top the following year. International bonds were near the bottom of the barrel in 2017, but rose to the top during the 2018 market selloff.

There are also large swings in the returns investors can expect in any given year. While the best-performing asset class returned just 1% in 2018, it returned a whopping 71.5% in 2009.

Variation Within Asset Classes

Within individual asset classes, the range in returns can also be quite large. Here’s the minimum, maximum, and average returns for each asset class. We’ve also shown each investment’s standard deviation, which is a measure of volatility or risk.

Return Variation Within Asset Classes Over History

Although emerging market stocks have seen the highest average return, they have also seen the highest standard deviation. On the flip side, T-bills have seen returns lower than inflation since 2009, but have come with the lowest risk.

Investors should factor in risk when they are looking at the return potential of an asset class.

Variety is the Spice of Portfolios

Upon reviewing the historical returns by asset class, there’s no particular investment that has consistently outperformed. Rankings have changed over time depending on a number of economic variables.

However, having a variety of asset classes can ensure you are best positioned to take advantage of tailwinds in any particular year. For instance, bonds have a low correlation with stocks and can cushion against losses during market downturns.

If your mirror could talk, it would tell you there’s no one asset class to rule them all—but a mix of asset classes may be your best chance at success.

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