Bhagat and Terjesen: To stay competitive, U.S. markets must reward performance—not politics
President Donald Trump’s America First Investment Policy touts that welcoming foreign investment and strengthening the United States’ “world-leading private and public capital markets will be a key part of America’s Golden Age.”
Of the $124 trillion market capitalization of the global stock market, U.S. stocks account for 49%, and international investors own 17% of those U.S. stocks. By comparison, Chinese stocks comprise 13% of the global stock market, and international equity ownership of Chinese stocks is just 3.4%.
Why does the U.S. stock market dominate internationally? Why are international investors attracted to the U.S. stock market? What can U.S. policymakers do to increase the attractiveness of U.S. stocks?
