2  Assets

Published

March 19, 2025

2.1 Introduction

TODO: What are the investments we can hold?

2.2 Asset classes

  • stocks: individual stocks, ETFs, mutual funds
  • bonds: treasuries, corporate bonds, municipal bonds
  • real estate, REITs
  • commodities, metals
  • cryptocurrency
  • collectables

2.3 US sectors

There are 11 sectors in the standard classification by MSCI, see Table 2.1.

Table 2.1: The 11 sectors in the standard classification by MSCI. Classification of super sectors by Morningstar Stock Sector Structure (2011), where C=Cyclical, D=Defensive, S=Sensitive. Market cap data is from this blog (2024).
# Sector Super Sector Market Cap [T$] Market Cap [%] Largest Co Co share [%] Vanguard ETF
1 Technology S 15.3 31.7 Microsoft 22.3 VGT
2 Financials C 6.1 12.7 Berkshire 12.9 VFH
3 Healthcare D 5.6 11.6 Eli Lilly 13.5 VHT
4 Discretionary C 4.9 10.2 Amazon 38.8 VCR
5 Communications S 4.6 9.5 Alphabet 25.8 VOX
6 Industrials S 3.9 8.1 GE Aerospace 4.7 VIS
7 Staples D 3.0 6.2 Walmart 14.7 VDC
8 Energy S 1.7 3.5 Exxon Mobil 30.9 VDE
9 Real estate C 1.1 2.3 Prologis 10.5 VNQ
10 Utilities D 1.0 2.1 NextEra 14.0 VPU
11 Materials C 1.0 2.1 Linde 21.4 VAW

2.4 Stock market is not the economy

  • Small businesses employ nearly half of the American workforce and represent 43.5% of America’s GDP.
  • Only 13% (2,790) of US companies with over $100 million in revenue are publicly traded.
  • Schlingemann, F.P. & Stulz, R.M. (2022). Have exchange-listed firms become less important for the economy? 1
  • Riley, N.J. (2021). The equity market and GDP: Less linked than you might think.
  • Private equity is becoming more influential.

1 Schlingemann & Stulz (2022).

2.5 Global stock markets

  • TODO