Estimated reading time: 10 minutes
“BRICS is the future” or “U.S. downfall” you’ve probably heard it all. But somehow, the money always finds its way back to the U.S.
U.S. has led the global economy for more than 130 years, since the 1890s. So why do investors keep coming back? If you’ve ever wondered that, this blog is just for you.
TABLE OF CONTENTS
The Numbers Don’t Lie
Source: IMF
Let’s start with the big picture.
In 2025, the U.S. remains the world’s largest economy. Its GDP has reached $30.51 trillion, way ahead of China’s $19.23 trillion and even Europe’s (43 countries combined) $27.87 trillion. In other words, the U.S. economy equals to ¼ of global output.
And it’s not just the economy. The stock market tells the same story. Together, the NYSE and Nasdaq account for nearly half of the world’s total value.
And when it comes to performance:
- 9 of the world’s 10 largest companies based on market capitalization in MSCI All Country World Index (ACWII) (a global equity index that measures the equity performance in both the developed and emerging markets) are from the U.S.
- Over the last decade, the S&P 500 has averaged 16.9% annual returns.
- A $10,000 investment in 2015 = $50,000 today (2025). Literally 5x in 10 years.
Capitalism & Innovation
Now, to fully appreciate the strength of the US economy, it’s important for you to understand how different economies around the globe work. The most widely used ones are these three: capitalism used by the U.S., communism by North Korea, and socialism by China or a mix of these.
So what is so special about capitalism used by the U.S. right? In this system, individuals and businesses, not the government, own and build things, deciding what to produce and how much, in what’s called a “free market”.
Unlike communism and socialism, the citizens under capitalism will have a stronger drive to work and innovate because they get to benefit from their success, instead of having it controlled by the government. And this kind of competitive environment sparks entrepreneurship and innovation in the US like nowhere else.
If you go into the official website of the NYSE, you would immediately see that it says “NYSE is capitalism at its best” – they are exactly what they claim to be, and that explains why a lot of growth happens over there.
Source: NYSE Texas
This freedom also makes the U.S. one of the easiest places in the world to start a business. Take Texas, for example, low taxes and business-friendly policies attract both startups and big companies. Tesla even moved its headquarters there, and in 2025 the NYSE launched NYSE Texas, a fully electronic equities exchange in Dallas just because of the policy.
Source: doingbusiness.org
And it’s not just Texas, starting a company in the U.S. comes with far fewer barriers than in most other countries. That’s why IPOs are booming. In Q2 2025 alone, there were about 50 new listings, and in 2024, the U.S. led the world in total IPO market value.
The Listing Magnet
Source: Zeekr
It’s not just American companies. As of 2025, there are over 530 international firms listed on U.S. exchanges like the NYSE and Nasdaq including:
- Zeekr (China)
- Birkenstock (Germany)
- Chagee (China)
- Grab (Malaysia)
Together, these global listings show how much trust the world still places in the U.S. markets.
If you’re wondering which sectors are driving these IPOs, most come from the tech, media and telecommunications (TMT) sector. Which is not surprising at all. The U.S. has always been at the front of innovation, from AI and electric vehicles to semiconductors and even space exploration.
Source: QQQ
Take QQQ, a tech-focused ETF that tracks the 100 largest non-financial companies. It’s been showing solid double-digit returns for YTD, 3-year, 5-year and even 15-year performance.
Rules and Regulations
One very underrated factor behind the U.S. staying on top for so long is its strong protection of intellectual property. The U.S. has always been a leader in patents, trademarks, copyrights, and trade secrets. This means innovators, creators, and businesses are well protected and can keep the rights to profit from their own work.
Of course, all that innovation and IP need a strong regulatory system to keep things in check. That’s where the Securities and Exchange Commission (SEC) comes in. Their job is to maintain market fairness, protect investors, and prevent fraud. They take it seriously, just look at cases like Nikola and Theranos scandal.
Source: IMF Blog
Because of these protections and strong regulations, the U.S. keeps attracting more foreign direct investment, venture capital, and private equity. It’s no surprise that the U.S. has been the top destination for global FDI since 2017, and it’s far ahead of the rest today.
The Power of the Dollar
Source: Federal Reserve System
When you invest in a country, you’re also indirectly investing in its currency. MYR for Bursa Malaysia, SGD for Singapore Exchange, and USD for the NYSE, simple as that.
But what actually makes a currency strong comes down to its foreign-exchange reserves. Central banks such as Bank Negara Malaysia hold these reserves in other currencies as backup funds if their own currency loses value.
The U.S. dollar has been the world’s reserve currency since World War II. As of 2024, it makes up roughly 58% of global reserves, far ahead of the euro, yen and pound. The Chinese yuan? Still sits around 2%.
That dominance shows just how much trust the world places in the dollar. It’s not only the top reserve currency but also the most used in global trade and payments. Roughly half of all international transactions are made in USD. Even commodities like oil and energy are priced in dollars, which further strengthens its global influence.
Run towards the US Dollar during the 2008 Great Financial Crisis
Peak Covid fear in 2020
Source: marketpulse
And whenever global markets panic, investors rush to the dollar as a safe haven. You can see the DXY (Dollar index) which measures the dollar’s strength against other major currencies. It spiked during the 2008 financial crisis and again in 2020 during peak COVID fear, because when chaos hits, people move their money to safety and that usually means moving to the USD. For foreign investors like us, this means lower currency risk and greater stability.
Liquidity
Another big reason the U.S. market stands out is its liquidity, and honestly, no other market comes even close.
Liquidity simply means how easily you can buy or sell a stock without changing its price too much. It’s like a busy marketplace, the more buyers and sellers there are, the easier it is to trade at a fair price. In stocks, this is reflected in the bid-ask spread. When trading volume is high, the gap between the two becomes smaller.
That’s why investors have more confidence in liquid markets. They can buy or sell quickly without big price swings, which also keeps the market more stable and harder to manipulate.
Source: World Federation of Exchange
When comparing liquidity across the world, the U.S. clearly leads. Based on total value traded, America consistently outperforms the APAC and EMEA regions. Even by exchange, the NYSE and Nasdaq top the list proving that the U.S. market is still the most active and liquid in the world.
Final Thoughts
At the end of the day, the U.S. economy’s strength comes down to its people too. Their education system shapes world-class talent and the open environment attracts the best minds from everywhere. Study shows that nearly two-thirds of America’s billion-dollar companies were founded or are now led by immigrants, and that mix of diversity and ambition keeps the country ahead.
Sure, the U.S. has its flaws, like their recent policy uncertainties and the risks of dedollarization threatened by the BRICS nation. Despite these flaws, I would say the US remains the safest bet and first choice for many investors, because their resilience is not built overnight, it’s built on centuries of economic leadership, financial strength, and investor trust coupled with continuous innovation.
If you prefer a video version of this article, I have made a video covering the exact same thing – do check it out here!
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