Barron's Streetwise Did the Optimists Triumph?
Jul 11, 2025
Amy Wu Silverman, Head of Derivative Strategy at RBC Capital Markets, dives deep into the complexities of today's stock market dynamics. She highlights the 125-year rise of the U.S. market and discusses the challenges index investors face. The conversation moves into portfolio strategies, evaluating how traditional allocations stack up against high-risk assets like Bitcoin. Silverman also sheds light on the intricate world of equity derivatives, revealing how geopolitical uncertainties heighten the demand for effective hedging strategies.
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US Market's Growing Dominance
- The U.S. stock market has grown from 14% to 64% of the world's stock market over 125 years.
- This dominant growth surpasses other countries, with the U.S. currently holding 73% of developed markets.
Japan's Stock Market Rise and Fall
- Japan led the world stock market at 40% in 1989 before its bubble burst, dropping below 6% today.
- This illustrates how dominant markets can rapidly lose their position due to asset bubbles.
International Diversification Limits For US
- International diversification works globally but has underperformed for U.S. investors.
- U.S. returns have been better with lower volatility at home than in foreign markets over decades.
