Stock Exchange Market Research

Business Report

22 Feb 2022
Introduction
The total market capitalization of all publicly traded securities around the world rose from US$2.5 trillion
in 1980 to US$93.7 trillion at the end of 2020.The stock markets of The United States made up 56% of
global stocks ($52.4 trillion), with the New York Stock Exchange (NYSE) and NASDAQ possessing a market
capitalization of $27.7 trillion and $15 trillion respectively. Furthermore, NYSE is also the largest stock
exchange in the world with NASDAQ trailing behind.

Largest stock exchange operators worldwide as of December 2021, by market capitalization of listed
companies

Types Of Investors
Market participants include individual investors, institutional investors and also publicly traded
corporations trading in their own shares. Robo-advisors, which automate investment for individuals are
also major participants. However, the main focus of this market research would be the individual
investors.

Demographics of Investors
More than 52% of the households (65 million) in the U.S hold investment in the stock markets. However,
percentages of market participation and the value of investment differs substantially depending on the
levels of income, ethnicities, and age.
According to a survey, households with annual income of less than $35000 hold approximately 19%
while the ones with incomes above $100,000 own 88% stocks either directly or indirectly. The median
holding is believed to be less than $10,000 for households with income of less than $35000 annually.
However, for those with annual income of more than $100,000, the median amount is expected to be
more than $130,000.

The demographic can be further broken down into race or ethnicity to have a deeper understanding of
the market. Households led by white individuals hold a whopping 61% majority share among all
households that have their money invested in the stock market. While the Hispanic and Black
households hold 28% and 31% in the stocks respectively. Measured by value, 24% of white, non-
Hispanic family assets were in stocks, compared to 13% for Blacks and 10% for Hispanics.

The rates and amount of money invested differs in respect to the age of an investor as well. For
instance, 41% individuals who are under the age of 35 have their money invested in stocks either
directly or indirectly. The percentage only moves upwards as the investors reach more seniority in terms
of their ages.

Assets accumulated over time also vary by age. Therefore, the median amount invested by young adult
households is $7,700 among investors younger than 35. However, it rises steadily with age, reaching
$22,000 for households headed by 35- to 44-year-olds, $51,000 for those ages 45 to 54 and $80,000 or
higher for those 55 and older.
It is also worth noting that the U.S stock exchanges derive a major chunk of its investments through
foreign investments, which exceeded $300 billion in 2020 and replaced corporations as the largest
source of equity demand. Over the last two decades, the biggest driver of foreign investor equity
demand has been a weakening U.S. dollar.

Stocks and Gen Z

Not surprisingly, investors who start when they’re younger have a tremendous advantage later on. It is a
significant part of the U.S population that still remains untouched and with proper measures, it could
bring in a lot of money into the market. However, there is still so much work to be done to encourage
young people to invest, and experienced investors have an important role to play. There are multiple
ways to empower others to start investing, such as:

The power of compounding: Don’t just talk about how investing early pays off over time, Demonstrate,
through relevant examples or studies as to how compounding can help them turn time into money.

Partnership with local organizations: Once corresponding with the young people about investing,
partner with local organizations who can help reach more people of a particular community . 
Social Media campaigns: The influence of social networking applications on young adults is undeniable.
Therefore, with effective marketing it is highly plausible to get the attention of your target audience.
Current Performance of Stock Market
2021 was a banner year for investors, with the S&P 500 racking up its third-best yearly performance in
the 21st century. The benchmark index climbed 26.9%. Add in dividends, and the S&P 500 total return
was 28.7%, powered by energy, finance, and large-cap tech stocks.

Time and again, investors brushed off news that could’ve derailed stocks in years past. A contested
presidential election, an assault on the Capitol, historically high inflation, supply chain disruptions,
naysayers who forecasted a correction that never appeared—none of these events stopped stocks from
notching all-time highs. Not even the still-raging global Covid-19 pandemic, or its Delta and Omicron
variants. In fact, the S&P 500 notched 70 all-time highs in 2021, a record that’s second only to 1995.
Morgan Stanley has a year-end 2022 target for the S&P 500 of 4,400, which would amount to a decline
of almost 9% from current levels. Conversely, Wells Fargo forecasts that the index could hit 5,300,
delivering another year of strong gains.

Analysts who cover individual stocks have a similarly optimistic outlook. When their 2022 price targets
for all companies in the S&P 500 are factored together, they see the index closing out 2022 at 5,225,
according to data compiled by FactSet.

U.S. Bank’s S&P 500 forecast sees the index reaching 5,060 in 2022, reflecting a “glass half full” outlook
based on still-strong corporate sales and profit growth, measured inflation and low interest rates,.

As impressive as last year was, few if any on Wall Street are predicting a repeat performance for 2022. A
whole swirl of factors are complicating market outlooks in the year to come. They include more hawkish
central banks, elevated inflation, and supply chain woes lingering at least through the first half of 2022,
and the long odds President Joe Biden faces in getting his Build Back Better stimulus spending plan to
pass in Congress.

Comeback for International Investing

Two of the chief reasons individual investors invest in international investments and investments with
international exposure are Growth and Diversification. Therefore, International investing may no longer
be on the back burner. Almost half of this year’s $55 billion in exchange-traded fund inflows has gone to
funds focused on companies outside the United States .

The U.S. has dominated developed and emerging international markets for over a decade. However, the
current rise in demand for international investment is a point of concern for the U.S based stock
exchanges. Out of 47 total-market country ETFs, the U.S. currently ranks at 41st (eighth-worst) in terms
of year-to-date returns, but there’s still a long way to go until international and U.S. investing come
close.

Big-time investors such as Warren Buffett have also been buying international stocks. A few years ago,
Buffett bought a number of Japanese trading companies, doing so on a currency-hedged basis.

Most Actively Traded Stocks

Following are the companies with the highest trading volumes currently: