In today’s world, working a 9-to-5 job no longer ensures the path to financial freedom — on the contrary. The world’s financial market has changed quite considerably, and most recent developments suggest that investments have become mandatory for ensuring long-term financial freedom (and safety). In fact, most financial experts suggest that people should attempt to invest at least a few dollars on a monthly basis.
Therefore, this article will include a series of key investment statistics, meant to depict the current financial market. Just some of the topics that we will cover include worldwide investment stats, investment banking, real estate investments, venture capitalism, the stock market, investing for young adults, and more.
To learn everything there is to know about investments and the financial market, just keep on reading!
Top 5 Crucial Stats and Facts on Investment — Editor’s Pick:
- The EU holds the world’s largest stock of direct foreign investments (abroad), estimated at $8.41 trillion.
- Between 2020 and 2021, the US real estate market value is estimated to increase by 4.1%, thus cementing its status as one of the fastest-growing investments.
- The leading bank in terms of investment banking revenue is JPMorgan, with a global revenue market share of 9%.
- Approximately 70% of surveyed Americans have stated that they regret not handling their money differently during 2019, as most would have liked to invest more.
- Only 22% of young US adults under the age of 35 owned stocks in 1989, whereas over 41% did so in 2016.
World Investment Statistics
1.According to the CIA, the EU holds the world’s largest stock of direct foreign investments (abroad), estimated at $8.41 trillion
Simply put, the stock of direct foreign investments (DFI) considers the USD value of all investments made by the residents of a specific country on the worldwide market. These investments are generally made by companies, and the DFI does not account for share purchases, according to foreign direct investment statistics. The last estimate was made on December 31, 2016.
2.By the end of 2017, the US held $5.64 trillion in direct foreign investments
The US takes third place on CIA’s list, right after the Netherlands which had a DFI of $5.8 trillion during the same time-frame. Some other top-ranking countries include Germany ($2.07 trillion), Hong Kong ($1.8 trillion), the UK ($1.63 trillion), Switzerland ($1.55 trillion), Japan ($1.54 trillion), Ireland ($1.49 trillion), and France ($1.45 trillion), according to investment statistics.
3. Countries with the lowest stock of direct foreign investments include Bosnia & Herzegovina, Bolivia, Sao Tome & Principe, Sierra Leone, Vanuatu, Rwanda, Montenegro, Solomon Islands, Malta, Guinea, and Mali
These nations hold anywhere between $0 and $72.2 million in direct foreign investments, as reported by the CIA.
4. According to Statista, the US made its biggest direct foreign investment in the Netherlands, followed by the UK and Luxembourg.
In total, the Netherlands received $866 billion, followed by the UK with $757 billion, Luxembourg with $713 billion, Ireland with $442 billion, Canada with $401 billion, and Switzerland with $278 billion.
Investment Banking Statistics
5. The leading bank in terms of investment banking revenue is JPMorgan, with a global revenue market share of 9%
This is a huge percentage for JPMorgan, which further reinforces its position as the biggest and most successful investment bank in the world.
6. In 2019, the total value of US-based investment banking fees was estimated at $42.54 billion
From a worldwide perspective, the fee value exceeds the $100-billion threshold. A more exact estimate cannot be provided due to insufficient reporting by several countries. In Europe, the Middle East, and Africa, the fee value is approximated at $22.11 billion, according to US business investment statistics.
7. Goldman Sachs is the leading mergers & acquisitions advisor for investment banking, in terms of deal value
At least 411 M&A deals have been processed and finalized by the leading investment bank, from a global perspective. On the other hand, JPMorgan is the leading financial advisor for worldwide mergers and acquisitions judging by the value of deals.
8. Investment banking careers are well-paid, seeing how new MBA graduates can expect to earn between $100,000–300,000 yearly, alongside performance bonuses
In addition, managing directors of investment banks can expect a base salary starting from $273,000. Generally, bonuses average $135,000 yearly, as reported by the Wall Street Oasis.
Real Estate Investment Statistics
9. Between 2020 and 2021, the US real estate market value is estimated to increase by 4.1%
This stat makes perfect sense, considering the fact that personal home values have increased by 7.2% between 2018 and 2019.
10. 74.4% of US-based rental properties are owned by individual real estate investors
Thus, we can easily conclude that the rental investment market is flourishing in the US. Similar values cannot be found anywhere else in the world, mainly due to the fact that the percentage of property owners is much higher in other regions, such as Europe, as reported by current investment trends.
11. In Europe, homeownership rates are the highest in Romania, where approximately 96% of people live in their own house
Other European countries with high homeownership rates include Poland (84.2%), Spain (77.1%), Cyprus (70.7%), the Netherlands (69.4%), and Denmark (62.2%). The latest data is from 2017, yet the situation should be quite similar today.
11. According to the following table, during Q1 of 2019, Germany had the most commercial real estate investments of all EU countries at 6.4 billion euros
|Country||Value of Commercial Real Estate Investments (in billions of euros)|
Venture Capital Investment Statistics
13. $50.62 billion was the reported value of late-stage venture capital deals during Q3 of 2018
Venture capital refers to small business financing provided by investors that have great market value and long-term growth potential. Venture capital can be described as a form of private equity, composed of contributions made by individuals or investment firms.
14. $1.7 million is the median seed deal value of start-ups and small businesses that are backed by VC funding
How to make money in stocks? Invest in a fast-expanding small business and wait a few years. At least, that is what VC firms do. On average, VC investments yield a median $1.7 million in funding, which is then used to purchase equipment, hire personnel, and fund marketing campaigns. Some VC-funded businesses even end up becoming public companies, further boosting their earning potential.
15. $447 million was the VC funding investment value for blockchain-related firms between 2015 and 2017
NA blockchain firms seem to attract quite a lot of VC funding due to their high long-term growth potential and the (future) mass-implementation of blockchain technology. This is true for other regions of the world as well, where blockchain tech is booming.
US Investment Statistics
16. In 2012, 33% of US-based households held at least one taxable investment account
When speaking about taxable investment accounts, we refer to financial instruments such as bonds, mutual funds or stocks, which the IRS taxes. However, this percentage does not take retirement investment accounts into consideration.
Source: FINRA Investor Education Foundation
17. In 2012, 89% of US-based households held a retirement investment account (401(K), IRA)
Only 29% of households exclusively held a retirement account, according to investment statistics of that period. On the other hand, reports indicate that, currently, 38% of households hold no investment accounts whatsoever.
Source: FINRA Investor Education Foundation
18. Approximately 70% of surveyed Americans have stated that they regret not handling their money differently during 2019
According to the report, 35% of surveyed citizens stated that they regret not investing a larger sum of money. 16% wanted to make more aggressive investments, whereas 15% regret not making more trades.
Only 5% of investors wish they invested less money. Other regrets include the failure to invest in an IPO, wishing they had sold off more or fewer investments, etc.
This is where some thorough investment analysis comes in handy. What is investment analysis, though, you may be asking yourself? Well, in a nutshell, it entails all the possible methods of evaluating risks, potential gains, cash flow, ROI, etc. of your investments. Hence, conducting proper investment analysis is absolutely essential before making any financial decision.
19. 30% of Americans were perfectly content with their 2019 investments
It will certainly be interesting to verify whether these trends will continue in 2020 and whether people will make the same choices this year.
Stock Market Statistics
20. In 2019, the world’s largest stock exchange in terms of its market cap was the New York Stock Exchange
In 2017, the NYSE had an overall capitalization of over $19 trillion. Its runner-ups are the NASDAQ, the London Stock Exchange, the Tokyo Stock Exchange, and the Shanghai Stock Exchange. In the Asian-Pacific region, the Japan Exchange Group is the largest stock exchange in terms of its market cap, as reported by stock market stats published in 2019.
21. Warren Buffett is the world’s most successful stock investor in terms of his net worth, currently estimated at $82.5 billion in 2019
According to Statista, the 2019 runner-ups were Joseph Safra ($25 billion), Jim Simons ($21 billion), Buti Hartono ($18 billion), and Ray Dalio ($18 billion). A quick look at the financial careers of these individuals will yield many an investment analysis example.
22. 10% of Americans own about 84% of all stocks on the market
Meaning, each person included in this 10% owns an average of almost $1 million in stocks. Consequently, many experts have argued that certain limitations should be placed on investments to ensure that a group of individuals cannot get the whole pie.
23. The bottom 50% of American stockholders own approximately $54,000 in stocks
While this is certainly a considerable amount of money, it is often not enough to reach financial freedom, unless much of the current cash flow is aggressively invested into well-performing stocks. Similarly, these people have a different definition of investment risk, as they can afford to lose a lot more.
Source: Financial Samurai
24. Most experts recommend the average investor to hold anywhere between 10–30 stocks in their portfolio
The argument here is that holding under 10 stocks means a lack of diversification, which could lead to a significant financial impact if stock prices are volatile during a downtrend. On the other hand, holding over 30 stocks is difficult as it entails constant monitoring, which takes too much effort on your part. Of course, it all depends on how much an investor can afford to lose, and the actual amount of money that is being invested in each stock.
Young People Investing in Stocks — The Numbers
25. The number of young adults that own stocks is actively growing — only 22% of US citizens under the age of 35 owned stocks in 1989, whereas over 41% did so back in 2016
The numbers are still relatively small, and reports indicate that young adults would be happy to invest in stocks more if they had fewer student loans and credit card debts. Investing from a young age is quintessential to ensuring financial freedom; the path towards this goal becomes much easier for those who start early. Some argue that a millennial investing app that keeps an updated and easy-to-use portfolio might stimulate the sense of investing among the younger generations.
26. According to a Gallup poll, 32% of citizens aged 18–34 believed that real estate is the best long-term investment
Stocks and mutual funds ranked second, with 26% of young adults believing in their long-term potential. Saving accounts are third on the preference list, with 21% supporters. Gold holds 11%, whereas bonds hold merely 7%. While these entail the top investments for young adults, it does not mean that a young investor should focus solely on these. The figures show similar results for US citizens over 35 years of age.
27. Over 25% of Gen Y individuals in the US are dealing with late credit card payments
Many also have dealings with bill collectors, whereas reports indicate that over 50% of people in this demographic receive financial aid from their families. This generation Y investment statistics explain why investment numbers remain fairly low.
Overall, the worldwide investment market is flourishing. An increasing number of people are improving their financial education and are willing to deal with a bit of risk, in exchange for long-term profit and potential financial freedom. Despite this, much of the financial market is controlled by the wealthiest, leaving beginner and intermediate investors with lower ROIs, and not even an exceptional investment guide can help them improve their odds.
Additionally, many live in fear of another market crash or economic crisis, whereas a portion of potential investors cannot afford to buy stocks due to current debts.