Stock Market History, Illuminated, 2024 Style

We’ve been keeping a graphic of the long-term performance of the US stock market for a few years now. In late 2017, we started blogging (and set up a Twitter/X account), and at the end of each year since we’ve been publicly sharing this information in the histogram below. It’s a different spin on visualizing long-term stock market returns, and how they have ebbed and flowed over time. Moreover, we have color-chunked the data by decade to more easily highlight decades of historical weakness as well as periods of strength.  

Further below, we’ve also added a few additional tables and charts which we think are interesting, and in some cases, stunning.  You can scroll down to follow along.  But first, the histogram:

 

                           

And if you look at the S&P 500 index, it outperformed the Dow 30 itself in 2024, significantly (25% vs 15%).  There are potential reasons for this (which we will discuss in a forthcoming piece) but in the meantime we should note how -  using the S&P 500 Index as the benchmark - the US has obliterated other major, developed equity markets.

Here is a ranking over the past year. 

And if we go back to the beginning of the last decade, the outperformance of the US over other countries has been nothing short of extraordinary. 

What particularly interests us is that– until the last decade ‐ European and US stock markets behaved very similarly over many, many years.  Given that many constituents in both markets are global businesses selling many similar products and services multi‐nationally to similar regions, countries and customers, this made sense. 

From the end of 1979 through the end of 2009, the total returns from Europe and the US were almost precisely the same (both of them 26‐baggers!), each generating 11.5% total annual returns over 30 years. 

But there has been a severe decoupling of returns since then. Annual returns of the SPX have literally been over double that of the MSCI Europe over the past 15 years.

Going forward, the big question for all of us is this European underperformance due to something that makes them chronically worse investments, or perhaps if the (real or perceived) geopolitical risk and uncertainty helps to explain this divergence in returns across the pond; or if something has happened in terms of valuation and price discovery in the US market. That won’t be the topic of this piece, but down the road, we’ll go there for sure.

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