U.S. stock market capitalization updates in 2022 and what that means for investors

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By knowing the stock market capitalization, investors can have an overview of the whole market and make general judgments when trading. The total value of US stock market capitalization is historical and updated in 2022? What does it mean for investors?

What is the total US stock market capitalization?

Market Capitalization is the total value of the number of shares outstanding on the market of a company or public enterprise. In the simplest terms, the market capitalization of a company or business is the total amount of money required to acquire the company or business, calculated at the market transaction price.

The capitalization of a company using the formula:

Market capitalization = Number of shares of the company outstanding multiplied by the current price of a share.

Thus, the total market capitalization of the US stock market is the total capitalization of all public companies that are headquartered in the US and are listed and traded on the New York Stock Exchange and Nasdaq. or the US OTC Market.

Total US stock market capitalization updated in 2022

In 2020, the total US stock market capitalization was US$40,719,661 million. The US stock market capitalization has grown from US$13,983,666 million in 2001 to US$40,719,661 million in 2020, an average annual growth rate of 7.51%. The total market value of listed US companies increased by 20.15% in 2020. Between January 1, 2010, and December 31, 2020, the market capitalization of US public companies increased by 170.11%.

Total U.S. stock market capitalization historical and updated 2022 in US dollars and GDP and what it means for investors
The growth rate of US stock market capitalization from 1975 to the present (Source: worldbank)

Total US stock market value in 2022 is US$48,264,353.4 million (updated March 31, 2022). Although the world has just gone through two years of a pandemic, the US stock market is still growing strongly. It is an admirable growth figure compared to other stock markets globally.

Total U.S. stock market capitalization historical and updated 2022 in US dollars and GDP and what it means for investors
The total market capitalization of the largest stock exchanges worldwide as of March 2022 (Source: Internet)

The average stock market capitalization as a percentage of US GDP for 1975-2020 was 96.85%. The minimum was 36.65% in 1978, and the maximum was 194.34% in 2020. For comparison, the average stock market capitalization percentile of the world’s GDP in 2020 based on 67 countries is 100.36%.

Total U.S. stock market capitalization historical and updated 2022 in US dollars and GDP and what it means for investors
Stock market capitalization as a percentage of US GDP from 1975 to present (Source: theglobaleconomy)

What does total stock market capitalization mean for investors?

As noted above, a country’s total stock market capitalization is calculated as the number of shares being traded on the stock exchange multiplied by their price. The total stock market capitalization of a country is a measure of the size of the stock market in the country. This metric is often reported and tracked as a percentage of GDP so that people can gauge the size of the stock market relative to the size of the economy. If a country has a stock market capitalization of 50% or more of GDP, it is considered a well-developed stock market.

When the stock price of a company increases, that company’s market capitalization grows as a result. And as the majority of companies in a country increase in market capitalization, so does the total capitalization of the stock market in that country. Investors use market capitalization to rank the size of companies, and a country’s total stock market capitalization is used to rank the relative size of the stock market in that country and is a measure of the total market capitalization of all companies listed in that country’s stock exchanges.

The total market capitalization of a stock market helps assess how large the stock market is, how reputable it is, how well it stands in the global market, and its potential for growth in the future.

When a country has a sizeable total market capitalization, the stock market also limits some liquidity risk. Usually, the total market capitalization of a country is always proportional to the reputation and trustworthiness and inversely proportional to the risk when investors trade in that market. Therefore, thanks to total market capitalization data, investors will choose stock markets with different capitalization levels to build a diversified investment portfolio to optimize profits, reduce losses, and minimize risk.

Conclusion

Many factors affect the total capitalization of the stock market, such as Interest rates, macroeconomics, inflation, and social situation… The number of companies and outstanding shares will also change when enterprises in that country issue new shares or newly listed companies appear. Therefore, the total market capitalization value is a timed index. There will be fluctuations.

Currently, the total value of the US stock market capitalization is ranked first in the world. However, not every company in the US is reputable and has good profit potential. Investors also need to have the skills to research and select specific stocks when deciding to invest in the US stock market.

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