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Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Tuesday, August 29, 2006

Global Stock Market Returns

We will examine the historical range of 1970-2000 to see how global markets performed and the risk that went along with these results.

The US averaged a 12.9% return during these years with a peak of 37.4% and trough of -26.5. Now the general international market returned 12.2% with a 69.9% peak and -23.2% trough. Then Europe averaged a 13% gain and had a high of 79.8% and a low of -22.8%. Finally, the Pacific had an 11.9% average with a peak of 107.5% and a low of -34.3%.

This looks like the Pacific had the highest volitility while providing the highest one-year gain. Now Europe had an excellent average return, but the volitility is high as well. The U.S. had a great average with the least amount of volitility. Combining all these classes will lower the overall volitility and allows you to experience big gains.

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