Germany Stock Market Valuations and Expected Future Returns

Updated at Tue, 28 Jun 2016 20:30:08 -0500
Country: Germany (updated daily) check out Global Overview for detailed methodology.

Ratio of total market cap over GDP: Maximum - 58%; Minimum - 13%; current - 42%
Expected future annual return: 0.2%

ETF Used for dividend yield: EWG (Yield=2.2%)
Market Index used: DAX Kursindex
Current Annual GDP: $4,131 billion US dollars or 3,015 in billions of national currency (GDP in Local Current Prices Annual Growth=2.32%)
Data since year 1990


Germany Historical GDP Growth

Historical GDP of Germany in billions of national currency. The GDP in local current prices has grown at the annual rate of 2.32% over the past 8 years. Please note this growth rate includes the effect of price inflation and it is NOT the real GDP growth rate. Current Annual GDP: $4,131 billion US dollars or 3,015 in billions of national currency.

Germany GDP (Billion, National Currency)

Historical Stock Market Cap

Historical total market of Germany in billions of national currency. This value is normalized using the data published by WorldBank. DAX Kursindex is used for the normalization. DAX German DAX Kursindex, data back to 1990. We did not use CDAX German all share index, because it goes back to 2000 only. We did not use DAX because it includes dividends. Normalization factor is calculated with the market cap over GDP ratio of 43.2% as of Dec. 30, 2010, according to WorldBank data

Germany Total Market Cap (Billion, National Currency)

Historical Ratio of Total Market Cap over GDP (%)

The current ratio of total market cap over GDP for Germany is 42%. The historical high was 58%; the historical low was 13%. If we assume that the ratio will reverse to the historical mean of 32% over the next 8 years, the contribution to expected annual return is -4.27%. This is the detailed historical chart of the ratio.

Germany Ratio of Total Market Cap over GDP (%)

Conclusion

The stock market of Germany is expected to return 0.2% a year for the coming years. This is from the contribution of economic growth in local current prices: 2.32%, Dividend Yield: 2.2% and valuation reverse to the mean -4.27%.

This is the projected return of the stock market in Germany relative to other countries. Click on each bar in the chart to go to other countries:


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