US stock-market is largest in the world and continue to be among the deepest, most liquid and most efficient markets. US market depth and breadth enables individual investors diverse choice like no other markets. Also dominant position of multinational corporations listed in US allows for global geographical diversification of the revenues which makes them more resilient but also allows to rip some benefits of the growth in Emerging Economies. While US Remains the world’s largest economy since 1871, currently at 23.6% share (GDP of $21.44t); US stock-market represents much bigger portion of the world’s equities at 54.5%. Given its dominance,…

Industry weights in US and UK market in 1900 and 2017Diversification reduces the exposure to any one particular distinct asset or risk. For the equity portion of the portfolio this can mean spreading investments across the world, diversifying by sector and buying shares in a lot of companies. That’s why low cost funds tracking broad market indexes are considered as a good long-term diversification instrument for an equity portfolio. Another reason for broad market diversification is the questionable ability of the individual investor to select winners or to avoid losers (nearly impossible tasks according to academic research). It is not…