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200 Years of Extraordinary Shifting Markets

31012019_evolving markets

200 Years of Extraordinary Shifting Markets

Stock market indices were introduced in the U.S. back in the 1800s. The market at that time was largely dominated by financial institutions such as Bank of America and the precursors to JPMorgan and Citigroup.

These financial institutions can be seen in the green in the below chart.

By the mid 1800s however, the stock market looked very different, with the birth of the transportation age and building of vast rail networks across the country. With the U.S. government offering subsidies and land grants to stimulate rapid growth of rail infrastructure, 60 per cent of the total stock market value was attributed to railroad related stocks (shown in blue in the chart below).

By the 1900s investors had started putting money into numerous other types of business like utilities, steel, energy, industrials, etc. with railroads remaining a dominant force in the market. However, by the mid 1900s, the market had become materially more diversified and today is more varied than it’s ever been. Information technology, communications and healthcare stocks, which basically did not exist at the turn of the 20th century are now many of America’s biggest corporations.

It is quite incredible to observe the transition through time visually and will leave many of us to ponder the question, what will the market look in 100 years from now?

Evolution of U.S. Market Capitalization by Sector 

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Source: Global Financial Data


Amit joined MGIM in April 2018 as a Senior Research Analyst after spending seven years as a credit analyst at Credit Agricole and Citigroup, based in New York. Prior to this, Amit was an investment banker with Citigroup for five years in New York and Sydney, focusing on Media and Telecoms; Metals and Mining; and Consumer Products.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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