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?
Americans and foreigners invest in stocks to earn a return commensurate with their risks. What assurance do investors have of receiving a fair…
