Where has the growth in global financial assets come from? - Chart Of The Day 13 February 2015 - Equitymaster

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Where has the growth in global financial assets come from?
Feb 13, 2015

With all the crisis', busts and recessions that have incessantly gripped various parts of the world since 2008, investors the world over have become a jittery lot. But as anxious as they may feel about all the funny things that are going on in various economies, today's chart shows that the stock of the world's financial assets has continued to grow through all the ups and downs during this period. It also breaks down the financial assets into stocks, bonds and government debt.

Starting from US$ 211 trillion in 2006, the grand total of the globe's financial assets now comes up to US$ 294 trillion in all. Further, while the total value of stocks constitutes US$ 69 trillion of this today, an overwhelming majority of this is not stocks but fixed income type securities like bonds, loans and sovereign debt. But what investors need to be wary about is the fact that more than 50% of total global financial assets are in bonds and loans that are unsecured and uncollateralized. All the more reason why any crisis will have snowball effect on asset prices.

Data source: Business Insider

This Chart Of The Day was published in The 5 Minute WrapUp - The single largest investor in Indian stocks is thinking of booking profits. Are you?

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