The circled region in Figure 2 highlights an equally
intriguing outcome. The returns for U.K. equities
and U.S. equities were nearly identical over our
1900–2009 sample, despite the fact that the United
Kingdom ceded its preeminent position as the
world’s leading economic, financial, and military
power to the United States over the course of the
20th century.4 During this time, the growth rate
of U.S. economic productivity outpaced that of
British real GDP growth per capita handily—on the
order of 1 percentage point per year. Yet the local
returns on the U.S. and U.K. stock markets were
virtually identical for American and British investors,
respectively (Dimson et al, 2003).