In markets, you can make many assumptions that seem reasonable but actually miss the mark.
For example, before I knew much about the global stock market, I thought investing in a country’s stock market meant you were investing in its economy. This is far from precise.
I guessed the U.S. stock market was the largest, but I also thought other countries’ markets weren’t far behind. I couldn’t have been more wrong.
And just a few years ago, I assumed that the U.S. stock market’s concentration in a handful of stocks was unusually high. I was wrong about that, too.
Below are a few charts from recent Wall Street research notes that tell us the truth about these imprecise assumptions.